Fintech innovations automating Cheque Processing
As much as the digital revolution has created multiple forms of paperless payment, from EFTs to cards to wearables, there is still a substantial amount of cheques still being issued, particularly for the B2B market. Cheques have some defining characteristics that may seem archaic in the new world of real time, instant payments but may actually be desirable in many instances, e.g. delays payment, ability to post date payment, simple to use, requires no knowledge of payees banking details etc.
However, the process of issuing and receiving can be cumbersome. Several fintechs have automated some aspects of cheque processing either by digitally issuing checks or using technology to digitise paper cheques while maintaining adequate security.
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Fintech innovations offering Cloud Based services
A driving factor behind the rise of fintechs has been access to technology and storage, at lower cost. Fintechs have leveraged these advantages to start offering niche based services with different pricing models as opposed to normal, location based technology.
Applications of cloud based fintech range from the obvious one like data and document storage to much more complex products like separating the elements of encryption in different layers. In addition, the cloud allows greater collaboration between developers and data analytics providers.
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Fintech Innovations that use Comparison Engines
The exponential increase in data as well as the willingness of people to share information has led to a rich set of data that peers can compare themselves to. In addition, there is an abundant set of technologies that allow data to be anonymised while being aggregated. The earliest versions of this were comparison of interest rates offered by banks.
However, this has evolved and it's now possible to compare your investment portfolio to others of a similar profile. The continued transparency in costs and benefits has led to a transfer of power to the consumer. However, the glut of information needs to be organised in a user friendly manner which is where the fintech industry has stepped in using efficient algorithms and cloud computing.
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Fintech innovations on Personal Financial Management (PFM)
PFM software has been around for over 30 years but was designed for the limited amount of PC users at the time. These were often used for household finances as well as for a small segment of individuals. However, the increase in information available to individuals as well as the ability to obtain a complete view of finances have led to a large number of vendors (and banks) offering PFM services to their clients. A PFM solution typically has two main features, i.e. can record transactions; and be able to aggregate information across different products to present a holistic view of current finances. Other features include automated savings, classification of transactions and budget tracking.
The ability to aggregate transactions and categorise them is at the heart of using data to manage money and, in most cases, in real time as well. Therefore financial decision making can be better informed with all relevant information available. In addition, the availabilityof investment information means that longer time financial decisions can also be taken. The ease of integration of current software with cloud based feeds have also made much of the processes automated with very little manual intervention required. It is now possible to view one’s overall wealth, simplified balance sheet, cash flows, debt management and progress towards financial goals.
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Fintech innovations that improve Reporting
The enormous amount of data generated from multiple sources in a bank often leads to a lack of holistic reports. Several fintechs have developed technologies that are able to extract data and aggregate these to be presented in a useful format
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Fintech innovations on Know Your Customer (KYC)
The dual threats of financial fraud and identity theft require banks to simultaneously comply with multiple regulations around KYC as well as respecting the consumer’s right to privacy. In addition, consumers have to manage multiple passwords and logins while increasingly moving their financial transactions to digital channels.
Fintechs have developed a range of potential solutions that both address the regulatory aspects as well as addressing the security issues around KYC and promoting ease of use. Many of these solutions use mobile as a channel along with the embedded camera technologies while others utilise cutting edge block chai technology.
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Fintech innovations on Multi Factor Authentication
Identity theft has been increasing in the financial services industry with the resultant increase in fraud and theft. Banks are increasingly fielding complaints and lawsuits that hold them at least partially liable. The increasing sophistication of fraud syndicates and ingenuity of thieves has led to the development of more robust defences against identity theft.
The traditional defence was a numeric pin code – although these have evolved into more complicated passwords, they still suffer from vulnerability in terms of hacking or coercive methods. Multiple authentication factors are increasingly used to prove identity based on the premise that it is difficult, if not impossible, for unauthorised people to supply more than two factors.
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Fintech innovations on Trading Technology
Share trading has moved beyond the discount brokerage model or the paid research model. Clients now have access to far greater information and a greater say in managing their own money. Thereare a great deal of online educational tools on financial literacy which areincreasing the number of participants in online share trading.
The democratisation of share ownership has also led to greater transparency in fees as well as availability of research. Several innovations have been developed around making it easier to access information beyond share prices and financial information. Ironically, the increase in information available has led to an increasing inability to process it – hence the development of tools like sentiment analysis drawn from data sources, including that from social media platforms.
Trading tools used to be the domain only of deal room desks but the rise of day traders has been fuelled in part by both the availability of information as well as enhanced trading tools. It is now possible to easily access algorithmic based trading strategies as well as simple systems to test trading strategies.
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Fintech innovations on Mortgages
The mortgage or home loan market has been characterised by tedious processes that start from the buying decision, together with scouting, loan application and closing the deal with copious amounts of documentation.
Since it is a large part of banking lending books, there are large teams that administer the laborious process. Customers have traditionally only interacted with a bank at the funding stage. However, the deconstruction of the entire home loan process into more granular stages has demonstrated that banks could become early influencers on both the buying decision and the funding and associated services that can be on sold to the customers, e.g. insurance
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Fintech innovations on Asset Management
The asset management industry has traditionally been characterised as a highly technical and skilled environment where fundamental analysis and expensive rigorous research, coupled with personal advice has resulted into a strategic moat around the industry. However, the democratisation of information, increased transparency and access to cheap but powerful analytics has resulted in a slew of fintech companies that have created compelling propositions at each part of the asset management value chain.
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15. Broker InnovationBroker Innovation
16. Card FraudCard Fraud
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19. Rapid prototypingRapid prototyping
20. Gamified fintech in trainingGamified fintech in training
21. Blockchain for non-paymentsBlockchain for non-payments
22. Fraud PreventionFraud Prevention
23. Artificial IntelligenceArtificial Intelligence
24. Portfolio ManagementPortfolio Management
25. Youth bankingYouth banking
26. Cost savingsCost savings
27. Natural Language ProcessingNatural Language Processing
28. Data analyticsData analytics
29. Process EfficiencyProcess Efficiency
30. Alternative credit scoringAlternative credit scoring
31. RegTech complianceRegTech compliance
33. Identity ManagementIdentity Management
34. Customer LifeTime ValueCustomer LifeTime Value
35. Bank in a boxBank in a box
36. Machine learningMachine learning
37. Financial inclusionFinancial inclusion
38. Share tradingShare trading
39. Robo advisorsRobo advisors
41. SME bankingSME banking
42. Digital account originationDigital account origination
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