Financial Institution – Sznurki Tue, 04 May 2021 11:02:02 +0000 en-US hourly 1 Financial Institution – Sznurki 32 32 As DeFi surpasses $ 140 billion, FATF stirs concerns over KYC / AML Tue, 04 May 2021 09:15:10 +0000

The decentralized finance (DeFi) market capitalization crossed the $ 140 billion mark for the first time today, an increase of over 500% since the start of 2021, and there are now over $ 128 billion. of dollars of total value stuck in DeFi, according to CoinGecko Data.

DeFi, which exploded in popularity during the summer of DeFi 2020, continued to grow in terms of the total value locked in DeFi protocols and the number of users. Last week, blockchain software technology company ConsenSys said the number of monthly active users for its MetaMask crypto wallet – a gateway to access DeFi – had increased five times in the past six months and now exceeded five million. .

DeFi refers to peer-to-peer financial services that are built on distributed networks without central intermediaries. DeFi applications include stablecoins, blockchain-based lending and borrowing, margin trading, payments, insurance, gaming, and non-fungible tokens (NFTs).

As the DeFi market matures, the industry sees a wave of regulatory focus on Know Your Customer / Anti-Money Laundering (KYC / AML) requirements, particularly related to self-hosted wallets, according to a recent ConsenSys Q1 2021 DeFi report. Regulators are trying to keep pace with developments and provide clarification to users and businesses, the report notes.

See the related article: What is the future of DeFi and what does it mean for traditional banks?

What is the FATF and why what it does matters

In March, the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, released its draft guidelines on “a risk-based approach to virtual assets and vendors of virtual asset services ”. According to some analysts, these guidelines, which could be approved later this year, could pose an existential threat to the burgeoning DeFi industry.

The FATF guidance, first published in 2019, imposed anti-money laundering and terrorist financing (AML / CFT) obligations on virtual assets and virtual asset service providers – similar to requirements generally required by banks and financial institutions. The 2019 guidance also extended FATF Recommendation 16 – commonly referred to as the “travel rule” – to VASPs. The travel rule requires financial institutions to transmit certain information to the following financial institution, as part of certain fund transfers involving multiple financial institutions.

According to the FATF, changes to its pre-existing guidance are aimed at maintaining a level playing field for VASPs, based on the financial services they provide in accordance with existing standards applicable to financial institutions, as well as minimizing opportunities for regulatory arbitrage between sectors. and countries.

What the FATF recommends is important because it defines global AML / CFT standards that regulators must implement, and countries are assessed every few years for their compliance with FATF AML / CFT standards.

See the related article: Hong Kong plans to ban retail investors from trading cryptocurrencies

“MAS keeps pace with the rapidly changing space of virtual assets. We are ready to adjust our regulatory approach to continue to promote responsible innovation that properly manages risk, ”said a spokesperson for the Monetary Authority of Singapore. Forkast. News in an email. “The FATF Guide, which is being finalized, aims to help jurisdictions and virtual asset service providers address risks in the industry. We study it carefully to assess whether our rules need to be changed. ”

Given the ease with which virtual assets can cross borders and the uneven implementation of international standards globally, international cooperation and coordination will be vital for regulators, according to a recent report on “Overseeing crypto-assets for the fight against money laundering ”by the Bank for International Settlements.

See the related article: KPMG: virtual asset service providers ready to professionalize and grow

If adopted, the updated FATF draft guidelines could significantly broaden the definition of VASPs to include cryptocurrency exchanges and Decentralized Application Owners or Operators (DApps), which could therefore require that ‘They are regulated to perform in-depth KYC / AML checks for every part of a transaction, including self-hosted wallets. VASPs should collect the required client information even for transactions involving non-hosted wallets where there is no home institution or beneficiary.

See the related article: How FATF’s Anti-Money Laundering Guidelines for Cryptocurrency Put Pressure on Banks and VASPs

Industry Responses to the FATF Guidance Draft

The public comment period for the draft guidance ended on April 20, with many organizations in the blockchain and crypto industry submitting responses to the FATF and calling for more clarification. The draft guidance was not approved and the FATF will make further changes at its June 2021 meetings.

These guidelines are “overall a step in the right direction” in terms of providing more clarity and certainty on regulations, said Chia Hock Lai, co-chair of the Blockchain Association Singapore, in an interview with Forkast. News. However, Chia added, more discussion is needed on the implementation timeline as well as the definitions of DeFi and NFT.

Others have expressed reservations or expressed concerns. They say parties could be classified as VASPs even when they are not responsible for the AML / CFT governance of a virtual asset project and therefore face unnecessary regulatory burden, alongside increasing responsibilities for supervisors in general.

The draft FATF guidelines were “a bit too broad” and need to be more narrowly defined so as not to have the unintended consequence of integrating people into the ecosystem, especially decentralized ones, which would subject them to regulations at the national level. said Malcolm Wright, chairman of the advisory board of Global Digital Finance, an industry group.

“We are very supportive of the guidance, but we want to continue working with the FATF and with national regulators, as we are doing now, to be able to shape this in a way that does not stifle growth, opportunities and innovation, and at the same time, mitigate the risks of money laundering, terrorist financing and the types of behavior we want to exclude, ”said Wright, in an interview with Forkast. News.

Grace Chong, FinTech regulatory lawyer at the international law firm Simmons & Simmons, advocates a balanced approach and that the FATF consider the practical implications of its draft guidelines.

“There have been a lot of concerns about how these recommendations, if implemented, might chill the industry,” she said in an interview with Forkast. News.

Lucy Gazmararian, co-chair of the blockchain committee of the Hong Kong Fintech Association, said Forkast. News: “DeFi currently operates with minimal KYC / AML controls and is largely unregulated compared to CeFi (centralized funding) where the regulatory framework is clear and centralized VASPs at a minimum must meet the standards set for traditional financial institutions.”

“While this imbalance between CeFi and DeFi needs to be addressed and expanding the definition of VASP is a reasonable way to achieve this, the problem is that without clear guidelines as to who / what / when becomes a VASP in the within a diverse decentralized ecosystem, regulators in different jurisdictions can be cautious and enforce too strict a regime, ”Gazmararian said. “As DeFi is still in its infancy and experimental stage, a tough regulatory approach can serve to stifle innovation and healthy development in the FinTech industry. At worst, a nonspecific approach can drive DeFi innovation underground and with it any associated ML / TF activity. “

For now, CeFi companies are already taking steps to meet FATF requirements. Cryptocurrency exchange announced this week that it will use CipherTrace’s Traveler solution, the first commercial solution to enable compliance with the FATF travel rule.

But there is still a lot to do. In its response to the draft guidelines, the Washington DC-based Blockchain Association pointed out that “newly captured non-conservative VASPs would not be able to comply with requirements such as asset freezes because protocol users decentralized financial institutions retain full independent control over their assets. Entities potentially captured by the draft updated guidelines that would be unable to implement or comply with existing AML / CFT controls in decentralized financial protocols include governance token holders, software developers, entities non-custodial and stand-alone computer programs. “

The Blockchain Association wrote that instead of trying to regulate a middleman that doesn’t exist or forcing projects to operate as regulatable forms, a more effective approach would be to focus efforts on development and adoption by consensus of new regulatory mechanisms that can be incorporated. in decentralized financing protocols.

“This way forward will require a partnership between the FATF and national authorities, on the one hand, and digital asset industry leaders, on the other hand, to design standards and solutions that meet legal needs, technical and commercial, ”the Blockchain Association wrote.

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Financial institutions’ most pressing digital lending priorities for 2021 Fri, 30 Apr 2021 04:13:16 +0000

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When it comes to digital transformation, an almost universal truth seems to emerge: many banks and credit unions feel behind where they need to be.

In fact, in a recent survey of 141 leaders of financial institutions, 53% said they felt at least a little behind – if not very far – from their peers. This response includes the perspective of executives representing institutions with assets exceeding $ 20 billion. Of those from the largest institutions that responded to the survey, 40% said they felt late.

Who can blame them? The pace of technological advancement is unlike anything the world has seen before. Exponential advancements in everything from data analytics and artificial intelligence to 5G, cloud computing and soon quantum processing are democratizing technologies that were once out of reach, making it hard to keep pace .

Big Tech Lending Experiences Turn Up the Pressure

Credit departments, in particular, are feeling the pressure of the competition to keep pace. Digital native loantech providers are entering the automotive, real estate and consumer credit markets, raising borrowers’ expectations for digital experiences to the same level as those offered by large corporations. technologies.

“Meeting the demand for Amazon-style experiences” was the second most popular response our survey respondents gave when asked to name the greatest headwinds impacting the success of their loans.

The biggest headwinds to loan success in 2021

Loan Demand Is Strong – If You Can Win The Funding Race

The unprecedented events of 2020 flooded credit unions and banks with liquidity, all eyes on the lending team.

Credit union savings growth is the fastest in 35 years and is expected to increase by around 15% in 2021 due to stimulus payments, pandemic uncertainty, low gas spending and an aging population, according to the CUNA Mutual Group Credit Union Trends Report for February 2021..

In our survey, getting more loans on the books and earning increased income from both interest and non-interest sources dominated the charts in terms of importance to credit unions and banks. The good news is that the demand for loans is there. With low interest rates and unprecedented federal support for lending to community institutions, the trick isn’t to convince consumers to borrow – it’s to win the finance race.

Targeting young consumers requires a solid loyalty strategy

It wasn’t terribly shocking to learn that the top three segments our survey participants focus on growing over the next five years are Millennials (born 1980-1994), Xennials (born 1980s). 1975-1985) and Generation Zers (born in 1995-2012). . Here are some of the strategies our survey participants devised to gain business from these hot segments:

  • Streamlined, easy-to-use automation, digitization and products.
  • Better online / mobile experience and tools.
  • Digital transformation and direct processing (STP).
  • Building personalized digital marketing automation and interaction platforms for highly engaged groups of members.
  • Develop mutually beneficial relationships by being proactive about people’s needs, rather than reacting to requests.

These are all great strategies and likely to be just as appealing to Gen X and Baby Boom consumers, too, in a post-pandemic environment. Why is this important for lenders? Because the average debt balance of Boomer (born 1946-1964) and Gen X (born 1965-1979) borrowers far exceeds that of Gen Y and Gen Z borrowers.

If marketers are successful in pushing Gen Z through the door, it’s important that they stay around long enough in their lifetimes to allow them to fully engage with the institution’s lending services.

Keep in mind:

To retain consumers – and attract new ones – digital capabilities and experiences are essential.

Of the more than 67 million credit union members in AdvantEdge Digital’s aggregate data set, more than half have a preference for digital services.

Nowadays, customer loyalty is based on strong digital experiences

Digital demand drives investment decisions

Another potential issue for lenders is how decisions about innovation are taken into account and ultimately made. When it comes to digital investment, the existing levels of engagement seem to guide the ship.

Financial Brand / AdvantEdge Digital survey participants said they plan to invest 2021 digital transformation dollars in online loan applications and account opening experiences, as well as overall improvements in mobile and online banking services.

A digital consumer is a profitable consumer

Interestingly, 26% of survey participants did not detect any change in digital engagement at their financial institution in 2020. Another 30% reported an actual decrease in engagement last year. Is it because consumers were finding new suppliers to meet their growing digital banking needs?

Knowing that a digital consumer is a profitable consumer, it highlights the opportunity cost of not leading consumers to digital. For financial institutions with a dual imperative of profitability, loss of engagement can be even more costly, as they can lose business to providers less concerned with the long-term financial well-being of consumers.

Lenders migrate to the cloud to gain agility and scale

When it comes to investing in digital, many financial institutions are turning to the cloud. Cloud-based software as a service (SaaS) solutions, in particular, are expected to gain a large chunk of that investment – some $ 118 billion in 2021 alone.

Much of this is due to the pandemic, Gartner says, which has forced organizations to optimize IT costs while supporting a remote workforce. Now that SaaS cloud applications have proven their worth, the wave of cloud demand is unlikely to recede.

Notably, 93% of respondents rated “operational improvements” as being very or somewhat important to the success of their loans in 2021. This suggests that lenders see a strong link between process and outcome. Indeed, as we have seen at AdvantEdge Digital, streamlined processes and the integration of intuitive human-centric technologies can have a big impact on getting new business and increasing revenue.

Cloud-based solutions have a lot to offer in the area of ​​operational improvements.

Executives of financial institutions are ‘extremely’ optimistic

Even after all of the pandemic chaos, fierce social unrest and devastating natural disasters at the regional level, 2020 has left the majority of financial institution executives with optimistic prospects. 89% of those who responded to our survey were optimistic about the future growth of their credit union or bank. Remarkably, more than half of those who say they are optimistic say they are extremely so.

Digital transformation is an ongoing journey – just keep moving forward.

Lenders who feel behind the pack on the digital transformation journey are not alone. The important thing is to keep moving forward. Executives who design their roadmaps for quick wins, capitalize on momentum, and pivot when needed stand the best chance of unlocking their digital potential, winning the business of more modern borrowers along the way.

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ZSuite Technologies chooses William Mills agency for public relations Tue, 27 Apr 2021 13:23:00 +0000

ATLANTA – (BUSINESS WIRE) – William Mills Agency, the largest independent public relations and marketing firm specializing in the financial sector, has been selected by ZSuite Technologies for its public relations services. Based in Burlington, MA, ZSuite is a financial technology company providing digital tools that help businesses and individuals automate the collection of recurring payments as well as the management and compliance of multi-use sub-account processes.

Founded in 2019, ZSuite Technologies was founded by bringing together experienced bankers and technology executives to help banks and credit unions compete in an ever-changing landscape. By strengthening the relationship between financial institutions and underserved consumers, ZSuite creates solutions that meet the needs of niche businesses and customers.

Scott Mills, President of William Mills Agency, said: “Fintechs that help financial institutions pursue new business segments using digital tools are a great place to live. ZSuite’s hyper-concentration and understanding of bankers’ needs will come in handy. ”

“Our partnership with the William Mills agency team is a strategic step in taking our brand to the next level,” said Nathan Baumeister, CEO of ZSuite Technologies. “As we continue to develop and deploy digital escrow tools that solve long-standing issues, ZSuite will constantly innovate in our solution. We are delighted with all of the success we have had so far with the William Mills team and look forward to what the future holds for the rest of 2021. ”

About ZSuite Technologies

ZSuite Technologies is a financial technology company that aims to supply community financial institutions with digital escrow products for specific business verticals that can be offered to their clients. ZSuite, ZRent, ZDeposit and ZEscrow products streamline the collection of recurring payments and automate management and compliance around multi-use sub-account processes.

To learn more about ZSuiteTechnologies and how it can help your financial institution, please visit or follow us on LinkedIn and Twitter.

About William Mills Agency

William Mills Agency is the nation’s largest public relations and marketing firm serving the fintech industry, with a focus on fintech providers. The agency has established its reputation through the successful execution of media relations, marketing services and crisis communication programs. The company serves clients of varying sizes, from small start-ups to large publicly traded companies. For more information, please visit

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Mazooma and Fifth Third Bank are the first to offer instant withdrawals in the sports betting and iGaming markets of $ 150 billion and above in the United States Tue, 27 Apr 2021 12:16:00 +0000

IGaming and sports betting players can now withdraw funds to their bank accounts instantly via The Clearing House’s RTP® network

TORONTO and CINCINNATI, April 27, 2021 / PRNewswire / – A Partnership Between Mazooma, The Gaming Industry Leader For Bank Account-Based Payments, And Fifth Third Bank, NA Brings Real-Time Withdrawals To The Sports Betting And iGaming Industries Through The RTP® Network by The Clearing House. The offer, now available to all Mazooma operators, allows players to receive payments immediately to their bank accounts, safely and securely, 24/7/365.

Instant payouts are a win-win for players and operators. Players enjoy peace of mind with the ability to instantly access their winnings. For the gaming operator, real-time withdrawals provide a better user experience than any other payment method available. These transactions are fully authenticated by bank account verification initiated by the Plaid user and are subject to rigorous risk management controls by Mazooma. In addition, all transactions are good funds, irrevocable and offer positive confirmation of payment status, thus building credibility and confidence in the market.

“This is an exciting time for Mazooma. Last week, Nuvei Corporation announced the agreement to acquire Mazooma. This week we are delighted to offer the ability to process payments in real time,” mentionned Dave roe, Director of Operations at Mazooma. “Coupled with Plaid’s transparent account verification, these innovative enhancements provide the best gaming experience on the market. Getting Fifth Third and The Clearing House involved in the transition to real-time payments is a game-changer. ”

“The sports betting and iGaming industries are strategic growth markets, and we are delighted to be a part of this innovative product launch,” mentionned Josh Dunaway, Vice President and Head of Cash Management at Fifth Third. “Through Integrated Payments, we are extending our reach and helping to enable an omnichannel consumer-centric experience. We couldn’t be happier with the strategic relationship with Mazooma and The Clearing House and its benefits to the gaming industry by. line.”

“The RTP network provides a platform for financial institutions, fintechs and businesses to create new innovative payment products for their customers”, mentionned Steve ledford, senior vice president of strategy and product development, The Clearing House. “Mazooma and Fifth Third’s instant payment offering is a great example of how the RTP network facilitates payment innovation.”

Real-time withdrawals are available to traders through Mazooma’s instant bank transfer product, and that’s just the start. Soon, the impending launch of real-time deposits promises to set a new industry bar for transparent payments in the sports betting and online gaming industries.

About Mazooma
Mazooma is a global payments technology company whose mission is to simplify payments. As a leading solution in sports betting and iGaming, our patented technology sits on the cash desk of sports betting and iGaming operators in the U.S. Delivering a top-notch experience, seamless integration and secure banking connections , Mazooma creates enthusiastic fans of traders and consumers. Based at Toronto, Canada, the company is trusted by leading brands such as DraftKings, BetMGM, theScore and PartyPoker. Mazooma recently entered into a definitive agreement to be acquired by Nuvei Corporation, subject to the approval of the Toronto Stock Exchange. To learn more, visit

About Fifth Third Bank
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. From December 31, 2020, Fifth Third had $ 205 billion assets and operated 1,134 full-service banking centers and 2,397 ATMs with the Fifth Third brand in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and Caroline from the south. In total, Fifth Third offers its customers access to approximately 52,000 toll-free ATMs. United States. Fifth Third operates four main businesses: commercial banking, branch banking, consumer lending, and wealth and asset management. Fifth Third is one of the largest fund managers in the Midwest and, as of December 31, 2020, had $ 434 billion of assets supported, of which he managed $ 54 billion for individuals, corporations and not-for-profit organizations through its trust and registered investment advisory activities. Investor information and press releases can be found at The common shares of Fifth Third are traded on the Nasdaq® Global Select Market under the symbol “FITB”. Fifth Third Bank was established in 1858. Deposit and credit products are offered by Fifth Third Bank, National Association. FDIC member.

About the clearing house
The Clearinghouse operates US-based payment networks that clear and settle over $ 2 trillion daily by wire transfer, ACH, check image and real-time payments. It is the most experienced payments company in the country, with a long history of delivering secure and reliable systems, payments innovation and strategic thought leadership to financial institutions. More recently, The Clearing House revolutionized the payment infrastructure in the United States with the RTP® network, which supports immediate payment clearing and settlement, as well as the ability to exchange associated payment information through the same secure channel. These RTP capabilities enable all financial institutions to deliver safer, faster and smarter digital transaction services to their corporate and retail customers. Learn more about

SOURCE Mazooma

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Barclays US to Offer Merchants Buy It Now, Pay Later Tue, 27 Apr 2021 12:07:12 +0000

Barclays US Consumer Bank will offer its merchant partners the ability to provide point-of-sale (POS) installment payment options later this year, making the London-based bank’s North American branch the latest financial institution to participate in the program. ‘immediate purchase. later (BNPL).

“Customers want products to buy now, pay for later. Our partners want them too. We see this as an extension of our business model, ”said Denny Nealon, CEO of Barclays US.

Barclays US is launching the service in partnership with technology provider Amount, which helps financial institutions integrate point-of-sale financing interfaces into their existing systems.

“We bring a lot to the table in terms of stability, relationships, underwriting and credit servicing, and in Amount we have found a partner who can really help accelerate our path to their technology platform,” said Nealon.

The bank had BNPL services on its product roadmap for some time and had initially planned to develop the product in-house, Nealon said.

“We looked at what we’re really good at and what it would cost us to be able to do it and do it well,” he said. “And then getting to know the team at Amount was a pretty easy decision.”

Amount, which is from Before online lender in January 2020, four banks are using or are expected to use its BNPL product, said CEO Adam Hughes.

TD Bank, another partner of Amount, uses the services of fintech to offer buyers a payment option in installments when making online purchases of products through NordicTrack, a merchant partner of the bank.

Through the partnership with Amount, Barclays said its merchant partners would be able to offer customers point-of-sale payment under the merchant’s own brand.

“Our whole model is based on the success of traders. We feel that by bringing this expertise, with our track record, our capital cost advantages and our service model, coupled with … this world-class platform created by Amount, it gives us a huge first-come strategic advantage that I think others haven’t yet, ”Nealon said. “We plan to use it to boost our growth and give our partners and customers more options to purchase products.”

Barclays and Amount have declined to share financial details of the partnership, but the majority of Amount’s income will come from transactions, as it takes a percentage of all loans Barclays processes through its services, Hughes said.

“As we expand this partnership, Barclays will be really excited to create new assets, merchants can be very happy to have unlocked this additional payment option, the customer has a choice and then has unlocked opportunities to additional income for our business, ”he said. “I am delighted to see banks, especially Barclays, really starting to lean into this category to offer these products that are clearly resonating with consumers.”

Consumer adoption of BNPL has taken off amid the pandemic, with payment volumes increasing by more than 50% among the top four companies in the space in the first nine months of 2020, according to the Wall Street Journal, which cited data from Autonomous Research.

BNPL trend is expected to grow. Consumers will spend an estimated $ 680 billion globally using point-of-sale installment payments on e-commerce channels by 2025, fintech research firm Kaleido Intelligence found in September.

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Hiltzik: Bitcoin is not a good currency Tue, 27 Apr 2021 12:00:36 +0000

All eyes in the bitcoin world and beyond were on Coinbase on April 14 when the company became the first cryptocurrency platform to go public.

It was a very good day. Shares opened at $ 381, hitting $ 429.54 before leveling off at $ 328.28. They were valued at the close of Monday’s session at $ 304.54 as the frenzy subsided, but that still valued the company at $ 60.6 billion.

Financial experts said it was the dawn of a new day. “Coinbase’s direct listing is a watershed moment for the crypto industry,” said a securities analyst.

Two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government or other institution.


Another called the company’s Nasdaq listing a sign of “the increasing adoption of bitcoin and crypto by the general public for years to come.”

Or maybe not. Coinbase’s IPO could be a sign of another market craze, with investors buying because they think others are buying, so why not? Evidence that bitcoin is becoming a “mainstream” financial asset is still scarce.

Of course, some banks have started to facilitate Bitcoin investments: JP Morgan Chase is preparing to deploy a Bitcoin mutual fund, for example. But whether this indicates its desire to offer something that some customers want rather than an asset approval in principle, it is unclear.

Elon Musk says his electric vehicle business Tesla will accept bitcoin payments, but as Coindesk, a crypto news service, recently observed, “It’s not easy.”

Customers must complete their payments within 30 minutes of a deal being made or the price of bitcoin expires and they must start over. Tesla warns that if you make a mistake – say entering the wrong recipient code into your Bitcoin account and Tesla will never get the money, that’s your problem.

The terms recognize that the value of Bitcoin can change drastically in the blink of an eye and that Bitcoin transactions cannot be reversed, even if they are in error. In other words, why don’t you pay in dollars, man?

Bitcoin fans say it’s an alternative to traditional currencies, which can be manipulated by national central banks to manage (or mismanage, if you prefer) their savings. Bitcoin – a financial instrument created by a computer algorithm and valued essentially at what everyone is willing to pay for it – is arguably immune to this kind of tinkering.

As an investment, bitcoin has been largely oversold by its fan base. Every now and then someone, often on reddit, brings up one of the columns I’ve written on Bitcoin over the years, invariably advising readers to be wary of investing in the thing. They’ll point out the latest price spike and chuckle at the madness of advising people to avoid $ 600 bitcoin when it’s now $ 20,000, $ 30,000, or (as it has been recently) $ 50,000.

Sure. If you’ve been hanging on to bitcoin since, say, 2013, when cryptocurrency first swam into public consciousness and was priced at a few hundred dollars per coin, until today (current listing on Coinbase: $ 53,924.99), you made a mint.

But how many people did that? To have been in the market for those eight or nine years, or even a good part of it, you would have had to survive not one, not three, but countless waves of bulls and bears.

From December 18, 2017 to February 10, 2018, the value of bitcoin fell 55%. This year alone, there have been three downdrafts of 20% or more in a week or two, and a further 16% drop over 12 days in March. (All metrics are from Coinbase.)

It is true that the stock market has been no stranger to bear markets, defined as declines of 20% or more. But there have been 16 since 1926, an average of every six years – not three in a single year.

Bitcoin fanatics, however, don’t really present cryptocurrency as an investment vehicle. They present it as a currency.

The problem is, as bad as bitcoin is as an investment, it’s even worse as a currency. Blogger Kevin Drum lists five characteristics that a currency should have: it should be difficult to counterfeit, stable in value, easy to transport, widely accepted and 100% liquid. Bitcoin fails three of these tests – its value is not stable, widely accepted, or 100% liquid.

As I have written in the past, the key bitcoin test is what we might call the Kenya storefront test. This stems from my time as a foreign correspondent in Nairobi in the 1980s, when the official exchange rate was around eight Kenyan shillings to the dollar.

Experienced foreign residents would not think of buying shillings at the official rate; they would like the black market rate, which was closer to 16 shillings to the dollar.

Expats wanting the best rate would go to a grocery store or ice cream parlor owned by an Indian merchant and write him a dollar check on an American bank in exchange for black market shillings. He mailed the check to a relative in the United States or Canada to deposit it there, and thus took out dollars out of Kenya in violation of the country’s strict currency exchange regulations.

The system has served everyone, except obviously the government. Indian families, who lived in fear of being kicked out of the country and their livelihoods by the Kenyan regime, would accumulate a nest egg abroad, and the foreigner would double its hold of shillings.

I have often thought that bitcoin would serve these merchants down to the ground – they could convert shillings or dollars into bitcoin wherever they were and convert them to dollars from a distance.

Of course, black market conversions were illegal, which is just one more class of users who value Bitcoin’s usefulness are criminals.

Bitcoin propagandists claim that the qualities that make cryptocurrency so useful for underground transactions are its virtue – a feature, not a bug. The advantage of bitcoin, they say, is that it works outside national central banking systems.

As Coinbase explains, “two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government or other institution.”

It’s supposed to be a good thing. “Most traditional liquid asset systems – banks, credit unions, brokerage houses, or even high-tech like PayPal – take control of your funds and leave you under their terms of service,” the finance site explains. personal “If they decide that you have violated these terms, they can suspend your account.”

When it comes to suspending an account for violating a financial institution’s terms of service, I’m with Nathan J. Robinson, the editor of Current Affairs, who pointed me to the above quote and writes : “This has not happened to me, ever.”

In fact, as Robinson points out, many of the oft-mentioned benefits of bitcoin – such as rock-solid “security”, anonymity, convenience – are either detrimental to the user or non-existent at all.

Who benefits from Bitcoin security, which takes the form of the inability to reverse a Bitcoin transaction once it is completed? Not the average consumer. Because these transactions take place without a trusted or regulated intermediary, no one can rectify a Bitcoin transaction with a counterparty that turns out to be fraudulent.

I may never have had an account suspended due to the terms of service, but many times I had to dispute a credit card bill or bank payment because I did not receive the goods or paid services. I have had stolen and misused credit and debit cards, and the allegedly untrustworthy bank that stood between me and the thieves provided all the compensation required by law. With Bitcoin, forget about it.

There are two keys to securing financial transactions: supervision and an audit trail. The money in your bank account goes astray, and bank records almost always show what happened and correct the error. With Bitcoin, there’s no oversight and no audit trail – and that’s supposed to be a plus?

It should be noted that “security” in the context of bitcoin does not mean “security against loss”. The most dramatic loss may be that linked to the old bitcoin exchange known as Mt. Gox, in which customer holdings went astray, at one point estimated at $ 1 trillion. The losses are almost certainly less than that, but some clients will never get all of their holdings back.

There are many other episodes in which Bitcoin accounts have been hacked by cybercriminals or lost when their owners lose their access codes, which cannot be reproduced.

Nothing in the bitcoin universe is like the FDIC or Securities Investor Protection Corp., U.S. government agencies that protect clients of banks and brokers against losses of up to $ 250,000 (FDIC) or $ 500,000 (SIPC). ) in the event of default of their financial institution.

Convenience? Bitcoin annals are bristling with threads about users who have lost their passcodes or “seeds” – phrases that can be used to regain access to a Bitcoin account – or who have had to go to extraordinary lengths to protect these. thieves codes.

“Store your seeds securely,” advises one user on reddit. “I used a metal stamp to punch my seed into a ¼ inch steel plate. After that I soaked it in plastisol so that it could not be read and stored in my safe with a description written on the outside. I also had another copy of the seed stored behind a photo at a trusted family member just in case.

As Bloomberg’s Matt Levine observes, “Everything I read about Bitcoin storage is exhausting.”

Bitcoin is not a mainstream asset by any stretch of the imagination. Drum likens it to collectibles, like baseball cards, although “a collector’s item that’s been the subject of a lot of hype.” It has no intrinsic value. It doesn’t even represent a theoretical claim on a national gold treasure, for example.

Its value depends on two interrelated factors: the desire of Bitcoin fans to continue buying and holding, and an artificially created scarcity. According to its creation document, the maximum number of bitcoins that can be “struck”, through a process of solving algorithms by powerful computers, is 21 million. About 18.7 million are already in circulation.

So invest in bitcoin if you want to. Try to buy a Tesla with them, if you have the patience. But they’re so painful to deal with that the smartest way to get a share of the stock is the way the smart gold bugs invest in this metal – they don’t buy bullion, but stocks in gold. companies in the gold industry. Now you can do it with Bitcoin, thanks to some ‘breakthrough’ IPO.

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Finadvant discusses compliance of SMB X-Border payments Tue, 27 Apr 2021 12:00:24 +0000

Small and medium-sized enterprises (SMEs) are enjoying their time in the spotlight of innovation in financial services.

Whether it’s large financial institutions (FIs), neobanks, or FinTechs, the finserv ecosystem is accelerating the emergence of digital-first solutions that target some of the most ingrained challenges and issues facing SMEs.

But there are still a lot of barriers that hinder the growth of SMEs, especially when it comes to companies that operate globally.

In recent years, efforts to solve cross-border business-to-business payment problems have largely focused on efforts to speed up transactions, reduce costs, and mitigate foreign exchange (FX) risks. However, Finadvant co-founder and CEO Katya Dorofejeva said end service providers continued to lack broad frictions for SMEs that need to send or receive funds overseas.

Speaking to PYMNTS, she highlighted the importance of end service providers supporting global SMEs beyond cross-border payment speed and affordability, and embracing a balance between technology and human connection.

The conundrum of compliance

For SMEs operating around the world, efficient cross-border B2B payments are essential to their survival. Whether it’s sending funds to international vendors or receiving funds from clients, ensuring that global transactions can go smoothly is key to healthy cash flow.

While finserv’s efforts to reduce the cost of cross-border transactions and the efficiency of support are valuable in today’s market, Dorofejeva said that finserv providers often lack the capacity to solve one of the biggest problems. that remain: conformity.

“A lot of [SMBs] have a hard time solving this problem with their banks as international payments are considered, in most cases, to be high risk – even if not with a high risk country, ”she explained. “Sometimes you will have questions about why this payment was sent or received, and for providing documentation.”

These compliance checks often cause delays that can seriously damage the financial health of an SME. Additionally, noted Dorofejeva, business owners can quickly become frustrated when faced with requests for information and documentation about a cross-border transaction, as they do not understand why such compliance checks are needed.

The banking common ground

One of the biggest frustrations with these compliance checks is that many SMBs actually share key information at the time of onboarding, but end service providers will require these companies to send the same data over and over again every time. such checks are necessary.

“Their frustration is that this information has already been passed on during the integration process,” noted Dorofejeva. “It has been adopted several times in other transactions, but the banks don’t keep that memory.”

This problem can often be attributed to an imbalance in the SME banking arena which, according to Dorofejeva, has failed to position FIs and their SME clients to effectively manage this workflow.

Larger banks that serve SMEs, for example, may initiate a strong customer onboarding process but fail to maintain a deep relationship with that customer throughout the lifecycle, creating a disconnect between onboarding and customer. when a cross-border payment – and possible compliance check – occurs.

“[High street banks] may forget about you right away, so there is no way to pass information from the people doing the integration to the stage where the account is working, ”Dorofejeva explained.

Neobanks and FinTechs, on the other hand, may have the reverse problem of less robust compliance controls at the time of onboarding, a result of the focus on customer acquisition, Dorofejeva said. Finserv players who focus on solopreneurs and microenterprises may prioritize companies that only operate nationally or, if they incorporate global SMEs, may often not understand how the business works and with whom.

Responding to the compliance issues of cross-border SMEs requires a balance between robust integration workflows and a continually close relationship with SMEs in order to understand the international business partners they work with and the cross-border transactions they will conduct.

Deepen the relationship

This month, Finadvant tackled this problem with the introduction of its small business banking platform designed for businesses operating across borders. The key to alleviating the burden of compliance is to ensure robust compliance controls at the time of onboarding, while maintaining close relationships to keep all of that information close at hand.

White labeling of business partners and suppliers of SMB customers, for example, can eliminate the need for repetitive data collection. As the solution develops, Dorofejeva said that Finadvant will seek to foster an ecosystem of SMEs and their business partners that can enable the company to integrate businesses from all sides of B2B transactions to further strengthen transparency and compliance when these companies transact.

Technology is an essential part of efficiency and safety. But as Dorofejeva explained, deepening the bank-SME relationship can be an equally important strategy for maintaining transparency and understanding of a company’s operations across borders.

“Small businesses always need this communication,” she said. “If they’re talking to an account manager who actually knows this business, that’s more important than just having customer support who answers your questions but has no idea about your business.”



About the study: A third of consumers who signed up for subscription services in the past year were just there for the free trial. In the 2021 Subscription Commerce Conversion Index, PYMNTS polls 2,022 U.S. consumers and analyzes more than 200 subscription commerce providers to focus on key features that turn “subscription curious” into persistent, long-term subscribers. term.

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Open Banking strengthens FinServ for companies Tue, 27 Apr 2021 12:00:09 +0000

Open banking is a global phenomenon, and as more banks and FinTechs collaborate to unlock customer data for enriched banking experiences, partners increasingly see small businesses and enterprises as key targets. innovation. This week’s bank-FinTech collaboration roundup explores the latest ties between Italy and India, and beyond.

Finastra authorizes global payments for Mizrahi-Tehafot bank

Israeli bank Mizrahi-Tehafot is working with Finastra to strengthen its cross-border payment capabilities, the companies recently revealed. In a press release, the companies said Finastra will integrate its Fusion Payments To Go solution, designed for small financial institutions looking to strengthen their global payments capabilities. The tool supports faster cross-border transactions with support for the ISO 20022 messaging standard. “Until now, we have been using in-house solutions for processing payments,” said Dudi Avni, Head of Distribution Channel Applications at Mizrahi-Tehafot Bank. “Residential and business customers are increasingly demanding a more transparent payment experience and a broader set of payment options.”

Finastra strengthens its commercial loan offer

In addition to working with Mizrahi-Tehafot Bank, Finastra plans to collaborate more with lenders to improve its commercial lending solution. In partnership with the Risk Management Association (RMA), Finastra seeks to help commercial lenders improve their risk management capabilities and advance the risk rating frameworks of commercial banks in the United States. RMA integrates its dual risk scorecard technology within Fusion CreditQuest, allowing banks to use the business lending portal to build underwriting capabilities, which RMA says is critical to supporting the recovery small and medium-sized enterprises.

AccessPay adopts open banking for treasurers

Partnering with open banking infrastructure provider Yapily, AccessPay is working to unlock corporate banking data to help treasurers in their quest for real-time cash flow visibility and cash flow management. AccessPay allows businesses to integrate their bank account information to consolidate data into AccessPay, rather than having to manually switch between a variety of accounts. According to Yapily’s announcement, “This is the first open banking use case in corporate cash management to hit the market and demonstrates how technological innovation creates better services for businesses. . “

ForwardAI unlocks SMB data for lenders

Like AccessPay, ForwardAI is seizing the opportunity to unlock corporate data. Yet instead of unlocking bank data, FinTech is looking to leverage siled financial information within third-party platforms of small and medium-sized businesses for faster and more secure underwriting. The company launched ForwardAI Precise, an API that enables banks to unlock FinTech data from SMB clients to improve loan underwriting with real-time visibility of finances and an enriched view of historical data for more accurate forecasting. “By streamlining access to accurate, standardized real-time data, ForwardAI Precise is ultimately accelerating growth in the SMB market at an extremely critical time – the faster businesses can get loans, the faster they will be successful,” co- ForwardAI founder and CEO Nick Chandi said in the statement.

ICICI Bank uses Decentro for business banking APIs

Indian bank ICICI is looking to deepen its relationships with FinTechs and third-party companies through API integrations, and has used the API Decentro banking platform to achieve this. Together, the companies promote ICICI Bank’s various APIs designed for business banking services, including payments and accounting. Decentro bundles these APIs for third-party FinTechs and businesses to unlock ICICI Bank data. “With this new product, we seek to empower existing and new business categories such as SME service providers, accounting firms, B2B markets and many more across the country,” said Rohit Taneja, founder and CEO of Decentro.

Banca Selle, Workinvoice collaborates on Corporate Finserv

In Italy, Banca Sella is working with FinTech Workinvoice to strengthen the investment banking capacities of the FI. The partners collaborate on the development of digital solutions for businesses, with a focus on financing. Their first joint offering will be a factoring service, followed by a reverse factoring tool, to inject supply chains with working capital. “Banca Sella was the first Italian institution to seize the value that open banking could generate for clients,” said Doris Messina, head of digital transformation and marketing at Banca Sella, adding that “collaborations like this will make a difference in the future and allow us to offer even faster and more efficient solutions. “



About the study: A third of consumers who signed up for subscription services in the past year were just there for the free trial. In the 2021 Subscription Commerce Conversion Index, PYMNTS polls 2,022 U.S. consumers and analyzes more than 200 subscription commerce providers to focus on key features that turn “subscription curious” into persistent, long-term subscribers. term.

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This next catalyst could boost marijuana stocks Tue, 27 Apr 2021 10:08:00 +0000

Here we go again. The Secure and Fair Enforcement (SAFE) banking bill was passed by the House earlier this month. If this sounds familiar to you, it’s because it passed the House in 2019, only to end up getting nowhere in the Senate. Democrats also included it as part of a coronavirus relief bill last year, only to have it finally deleted.

But this time things are different. Unlike in previous years when there was strong opposition in the Republican-controlled Senate, Democrats now control Congress. There is a much greater chance that the bill will not only receive some attention in the Senate, but will pass. Here’s why the bill is important and why it could propel pot stocks to new heights.

Image source: Getty Images.

It will address some major industry issues

The SAFE banking bill would make it easier for banks to do business with cannabis companies. Many large financial institutions are reluctant to offer services to marijuana businesses due to the federal marijuana ban, which can make it difficult to get a simple bank account. This does not mean that no one offers banking services. According to the Financial Crimes Enforcement Network (FinCEN), 515 banks and 169 credit unions were providing banking services to the sector at the end of the first quarter of 2021.

But that doesn’t mean cannabis companies can get loans or that the process isn’t cumbersome for financial institutions. Banks dealing with an illicit industry like marijuana must file a Suspicious Activity Report (SAR). FinCEN does not have a depository institution on its list unless it receives a SAR (which should be every 90 days). And with data from FinCEN showing a decline in the number of banks offering services over the past year, the pandemic and downsizing may have exacerbated those filing efforts.

For the cannabis industry, the lack of services means that not only is funding nearly impossible, but there is also no longer a need to carry cash. This can make dispensaries a target for burglaries, which is why cannabis companies often seek security services to help protect their assets and employees.

Under the SAFE banking bill, large banks would be free to do business with cannabis companies that operate legally in their state, without fear of repercussions.

Why SAFE Banking might still not pass the Senate

Although Democrats have control of the Senate, it is not a guarantee that they will all vote in favor of the SAFE bank. But another reason it may not come into law now is that Senate Majority Leader Chuck Schumer has his eyes set on even bigger changes that involve legalization. In an interview with Marijuana Moment, he said: “I have always been of the opinion that while we certainly have to deal with banking and financial issues, we should do them along with legalization.” The aim is to get “as large a coalition as possible” to support the bill.

Banking reform looks likely to happen, but questions remain as to when it might happen if Schumer is working on a legalization bill for the first time. Either way, with Democrats now in charge of Congress amid heavy pressure for meaningful marijuana reform, it’s less about if change is happening and more so about when it will take place and the extent of the scope of the legislation.

Why now might be a great time to hold pot stocks in your portfolio

Since the federal election in November, the Horizons Marijuana Life Sciences ETF climbed more than 68%, well ahead of the S&P 500 and its gains of about 25%. Actions of the large multi-state operator Curaleaf Fund (OTC: CURLF) increased by more than 30% during this period while Green thumb industries is up over 60%. With marijuana reform in the news and a large state like New York recently legalizing recreational cannabis, investors have been bullish on the industry.

The only major hurdle remains the federal ban on the pot, which, once gone, could open the floodgates for more expansion and growth. A licensed producer like Curaleaf would no longer need to acquire dispensaries in other states to expand their reach across the country. They could just ship products across states, which they can’t do today.

But even if outright legalization doesn’t happen, marijuana reform seems to be on the horizon – and that alone could change the outlook for the industry and pave the way for bigger changes in the future. One of them could involve US-based pot stocks moving to major exchanges like the New York Stock Exchange or the Nasdaq, which Curaleaf director Boris Jordan is optimistic could happen. starting this year. Canopy growth CEO David Klein is also optimistic about the reform and believes his Canadian company will be able to enter the U.S. pot market by 2022.

Whether you think their projections are too optimistic, the outlook for the industry is much better than it was just six months ago under a Republican-controlled government, where there was little hope. let the marijuana reform pass. Research firm BDSA predicts that the U.S. cannabis market will be worth $ 34.5 billion in 2025 and grow at a compound annual rate of 18% by then. Holding pot stocks in your portfolio today could set you up for tremendous long-term growth in the years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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What are the opportunities in messaging banking? Tue, 27 Apr 2021 09:35:11 +0000

While the majority of the big banks’ digital transformation is well underway, customer engagement metrics are firmly focused on the mobile apps they continue to iterate, not on closed branches. In January, HSBC revealed that only 10 percent of customer contact was through its branches.

But boosting customer engagement on a banking app isn’t easy. It’s an obstacle that incumbents and digital disruptors face on a daily basis. As Silvia Mensdorff-Pouilly, Head of Banking Solutions for Europe at FIS, points out: “Ninety-five percent of the world’s population just doesn’t want to think about banking.”

But what if banks don’t just offer their services to customers through a closed-loop app? Messaging services are a communication channel that a small but growing number of banks and fintechs are exploring. And technology is already taking many forms.

Banks can use messaging-based banking interactions to really get customers thinking about the banking side of what they’re doing at this point.

French banking challenger Zelf integrates with Facebook-owned Messenger and WhatsApp, displaying “balance” and “send money” buttons at the bottom of applications. Meanwhile, Israeli fintech PayKey is integrating banking services into consumer keyboards, functioning much like a GIF (graphical interchange format) or emoji keyboard.

Other players have introduced the two services side by side, instead of mixing them. Japanese messaging service LINE, along with Russian digital bank Tinkoff, have split messaging and banking services into different tabs of their apps.

New space to challenge customers

Unlike banking apps, messaging services hold a much larger share of people’s attention span. Sheila Kagan, Managing Director of PayKey, estimates that “a user spends up to 30 minutes in a banking app each month compared to up to three hours a day in mobile messaging environments.”

According to Facebook, 100 billion WhatsApp messages were sent every day in the third quarter of 2020. This equates to 69 million per minute. In the UK, data from the regulator Ofcom from 2019 revealed that 49% of the population uses instant messaging every week.

“Courier banking gives you the opportunity to challenge the consumer,” says Mensdorff-Pouilly. “Banks can use messaging-based banking interactions to really get customers to think about the banking aspect of what they’re doing at this point.” If a customer used a keyword, such as “must” or “broke,” banks could use that as an entry point to suggest how their services could help.

Currently, the technology does not benefit from huge investments from incumbent banks in the UK beyond in-app chatbots designed to replace customer service call centers. Experts, on the contrary, point further to Southeast Asia, Latin America and Spain as areas harnessing the potential of messenger-based banking innovation.

How the technology is used

Although they are still in the embryonic stages of development, the early players in the messaging-based banking industry have already succeeded in collecting information on the services used by customers. PayKey, which licenses its technology to banks including Standard Chartered Korea, lists payment transfers as the most used feature, closely followed by account balance checks and then billing.

LINE, which launched its LINE BK digital bank in Thailand, with help from Kasikornbank in October 2020, now receives 20,000 personal loan applications per day. The Japanese messaging giant has so far convinced two million of its Taiwanese users to interact with integrated banking services. For about 30% of its approved loan applicants, this is their first line of credit with a financial institution.

Digital bank challenger Zelf, who lives in France and is preparing to launch in Spain, currently facilitates transactions between £ 15 and £ 20. “Users exchange money the same way they discuss their concerts,” says Zelf CEO Elliot Goykhman, stressing the ease of paying bills through messaging platforms. He suggests that the technology offers a path to business customer demographics, as well as peer-to-peer spaces.

For Tinkoff, its messaging feature, launched through its banking app last year, serves as an indirect marketing channel. “I don’t think anyone at Tinkoff thinks we have the next WhatsApp,” says Neri Tollardo, strategy director for the Russian neobank. “We see it as a viral mechanism through which customers can recommend products to each other.” Currently, 1.3 million customers use Tinkoff’s messaging service, or about 10 percent of its overall customer base.

To weigh the pros and cons

As Zelf’s offering proves, messaging-based banking is not necessarily a suitable solution for more transaction-based services. “At some point, you have to get out of it and take it seriously,” says Mensdorff-Pouilly. “I can’t imagine, you know, taking a mortgage on courier banking.”

Connecting banking services to messaging apps is also fueling customer privacy concerns. In May 2020, Chinese messaging giant WeChat announced plans to offer a credit rating to its 600 million users. This raised concerns about how users’ messages might be used. For example, if a user submits something “anti-state”, can WeChat use it to negatively impact a credit score?

More generally, the link between Big Tech platforms and banks raises concerns around trust. “If only Facebook manages it [independent of the banks], there would be a problem, ”Kagan said. In July 2019, US Big Tech paid a record fine of $ 5 billion to address privacy concerns. In the same breath, Kagan acknowledges that “banks must be in front of the customers, whatever the platform”.

Ultimately, it looks like banks will have to weigh the potential for increased profits against the likelihood of new data risks. As LINE BK CEO Tana Pothikamjorn explains: “The potential of social banking is the ability to analyze financial and social activities in symbiosis. This, in turn, allows banks to get more personalized loan, investment and insurance products right in front of the customer. Privacy concerns aside, the business case for email banking is compelling.

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