Fintech

Fintech

 

Luiz Zorzella shares a summarized evolution story on Open Banking. 

If you are thinking your response to what is happening around Open Banking, this will provide you with some valuable historical context on how events evolved to get us where we are today:

It all started with online banking.

Before Open Banking, banks thought it would be a good idea to give their clients access to their accounts using the internet. 

So, since clients could access their accounts using online banking – some start-ups realized that if these customers provided them with their bank login information, they could log in on these accounts and manage them on their behalf.

Also, at that time, legislation was evolving.

In most of the World, there is customer data that banks cannot share, even if authorized by the customer.  For example, credit data.

However, in recent years, if, on the one hand, you see a tightening in data privacy protection, on the other hand, you also see the relaxation and regulation of financial data sharing.

These two factors – the spreading and deepening of online banking and the regulation of financial data sharing, beget a whole generation of fintechs. 

These start-ups had algorithms that logged in your account, copied the information displayed on the screen, interpreted that information and used this data to populate their database to provide you with their services.

 

Key points include:

  • The fallibility of algorithms
  • Accessing client data and functionality
  • Three types of APIs

 

Read the full article, Trailing the Peculiar Origin and History of Open Banking, on Amquant.com.

 

 

Luiz Zorzella shares an article on the growth of open banking, the factors that “repress” adoption, and possible solutions. 

As you probably know, worldwide, Open Banking is one of the hottest trends in financial services. 

Not only is it growing at a breakneck speed, but also its success is inspiring regulators and players in other sectors like finance and insurance who now wonder how to replicate the model.

This article is a high-level review of what is happening in Open Banking today.

Growth

As I said, Open Banking is growing.  To understand how fast it grows, consider that the UK (the pioneer in adopting it) formally started this journey less than three years ago, followed by Hong Kong, the EU, South Korea and Singapore. In the US, the Consumer Financial Protection Bureau joined the race in 2019.  Twenty other countries followed suit, including Canada, Australia, India, Japan, Israel and India.

As a result, high growth rates in each market are being compounded by the entry of new markets.

For example, in Europe, when a market opens, it has explosive growth, which tends to stabilize in the single digits range (per month) once it reaches ~8 API calls per inhabitants per month.  But, as the UK “stabilizes”, new entrants like Italy, Germany and France push the averages up.

 

Key points include:

  • Debottlenecking
  • Screen scraping solutions by Fintechs
  • Emerging intermediaries

 

Read the full article, Open Banking Market Unleashed, on Amquant.com.

 

Umbrex is pleased to welcome Eduard Saez with Antifragile Solutions.  Eduard Sáez spent 3 years at Bain & Company, mainly focused in M&A and Private Equity practice.

After those years, Eduard co-founded a fashion ecommerce startup. He exited the company after selling his equity to an industrial investor, and decided to travel the world for a while.

He is currently living in Andorra, working as an independent consultant doing strategy & marketing projects mainly in the fintech space. He also founded Antifragile Solutions, an advisory firm with a top talent network of freelance strategy consultants specialized in delivering projects globally.

 

Neil Bansal shares a post that explores the lack of financial literacy in the US, and asks what can be done about it. 

So how would you rate your financial literacy? If someone asked “True or false: buying a single company’s stock usually provides a safer return than a stock mutual fund”, how would you respond?

 If you incorrectly answered ‘true’ and neglected how diversification lowers your risk versus a single stock, don’t feel too bad. In a comprehensive 2018 survey by the regulatory organization FINRA, less than half of Americans (43%) correctly answered this question ‘false’. Even fewer (26%) correctly knew that bond prices fall when interest rates rise. 

The results of six fundamental questions across economics and personal finance provide a dismal view of financial literacy and a slow but clear decline over time (the survey is repeated every three years). We shouldn’t be surprised by such results. In the same survey only 20% of respondents mentioned participating in any financial education in school or the workplace, yet there is a disturbing gap between self-perceptions and actual financial behaviors and feelings. In the survey when asked “I am good at dealing with day-to-day financial matters, such as checking accounts, credit and debit cards, and tracking expenses”, an incredible 77% rated themselves positively with a 5, 6 or 7 on a scale from 1-“disagree” to 7-“strongly agree”. Within this 77%, almost half gave themselves the highest self-score of a 7 yet nearly a third of this group admitted to costly credit card behaviors such as only paying the minimum balance, paying late fees or even using the card for cash advances! 

Other surveys show similar results and get into the emotional toll it is taking on younger consumers. A 2019 Business Insider/Morning Consult poll showed that more than half of all millennials and Gen X respondents were stressed “some” or “a lot” about their credit card, personal loan or student loan debts.

 

Points included in this article:

  • Generational banking
  • Fintech
  • Financial education

 

Read the full article, Is Teenage Banking The Path To Greater Financial Literacy?, on CoppertreePartners.com.

 

Umbrex is pleased to welcome Rashay Jethalal.  Rashay has over 20 years of experience in North American financial services and a deep passion for scaling modern businesses.  He had led businesses in asset management (Purpose Investments) and transaction banking (CIBC) and a proven track record of providing strategic advice in both capital markets and retail banking.  He enjoys working with early stage and rapidly scaling new ventures, particularly in the fintech space.  Rashay has deep acumen in growth strategy and transformation.  He lives in Toronto, with his wife and two daughters, and is an avid basketball fan. In his spare time, he also enjoys angel investing.

Umbrex is pleased to welcome Ricardo Fernandez to our community.  Ricardo Fernandez spent 10 years in consulting in BCG, Accenture and KPMG focusing on strategic projects, due diligences, innovation, integrations and business plans.

The last 8 years he has been focusing on digital growth technology companies where he has experience in Growth, Sales, Marketing Operations and mostly in Financial Services. He recently left Prodigy Finance a Fintech marketplace that has originated $1B to lend to international students going to the top masters around the world.

Ricardo was CSMO and led up strategic partnerships for the company while sitting on the executive committee. Ricardo is based in Madrid and has 2 kids. He is an Engineer from UC Berkeley (with Honors) & MBA from INSEAD with a scholarship from Fundación Rafael del Pino.

Ricardo is happy to collaborate on projects focused on growth, sales and strategy in Europe