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FinSS and Salt Edge partner for CDR Compliance solution in Australia

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Australia is at the forefront of giving consumers greater control over their data via Customer Data Right (CDR). With phase two of the regulatory adoption quickly approaching, Australian data holders are welcoming a new CDR Compliance solution on the market. The technology solutions expert FinSS Global joined forces with Salt Edge, a leader in developing open banking compliance products, to enable local data holders to meet all the strict CDR requirements within less than 2 months.

As the Australian Government is committed to enforcing the regulatory adoption by the market, with the financial sector being the first one, institutions are now racing to become CDR compliant in 2021. That’s why FinSS Global and Salt Edge are aiming to help banks, credit unions, building societies, EMIs, neobanks, and other financial institutions follow strict regulations while protecting customers’ data and privacy under open banking.

The CDR Compliance solution has a holistic approach and is made up of components and configuration items such as an API for sharing consumer data together with a sandbox for ADRs’ testing, a Consent Management API to assure end-customers’ full visibility and control over their granted contents, a dashboard for the data holder to have full control and access to insightful statistics, an ADR Developer Portal for seamless integration and interaction with bank’s channel, a Multi-factor authentication solution for end-customers’ security, ADR verification, and much more.

The solution is based on a SaaS model which makes it easily deployable and also reduces the amount of technical implication and skills required from data holders. Salt Edge handles all the maintenance, regular updates according to new changes in the CDS requirements, and even assists with passing the Conformance Test Suite (CTS).

Open banking represents just the first phase of Australia’s strategy in making the sharing of any kind of customer data easier. That’s why the CDR Compliance solution is flexible and can be tailored so that it fits any industry or business case requirements including the addition of payment initiation possibilities.

Dallas Newton, CEO and Co-Founder at FinSS Global, said, “We partnered with Salt Edge in 2020 because we believed their experience with PSD2 in the UK and Europe and some of their solutions could be of significant benefit to the smaller Australia Financial Institutions looking for help in their CDR Compliance journey and participation in the emerging CDR Ecosystem. This resulted in us working closely with Salt Edge to adapt their SaaS-based PSD2 “Compliance in a Box” solution for the small to medium banking domain in Australia and our launch of the CDR Compliance Solution. We are excited to be working with Salt Edge and reach our target market, and we look forward to leveraging a functional, secure, cost-effective, hosted solution to rapidly have data holders join the CDR Ecosystem.

Lisa Gutu, Head of Business at Salt Edge, commented, “While helping out businesses across the globe to set their strategy in leveraging open banking, we understood that all of it might often seem like a regulatory and technological burden for institutions. That’s why together with FinSS Global, we’re committed to guiding Australian financial institutions towards a seamless CDR compliance journey.”

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Source: https://australianfintech.com.au/finss-and-salt-edge-partner-for-cdr-compliance-solution-in-australia/

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The rise and rise of digital banking: how Fintech is set to disrupt brick and mortar banking

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Banking has evolved at a rapid pace over the course of the 21st Century so far. The days where you would find yourself queuing at your local bank in order to open an account, make a deposit, transfer money or cash a cheque are long gone. With digital banking’s continued rise leading to more industry disruption, is there a place in the future for brick and mortar banks?

The emergence of online banking has led to vastly improved levels of access to financial services while significantly reducing the need for account holders to physically visit their local banking branches. As new technology entered the industry, many banks have acted fairly quickly to accommodate new digital approaches and upgrade their services accordingly.

With more established names in finance investing big in terms of capital markets and wealth management among other forms of fintech, there’s little sign that the wave of innovation is going to be slowing down. With more digital approaches to banking being developed and rolled out, could major banks soon go entirely digital?

The potential that fintech holds for the future has been heavily showcased over the course of 2020, as the COVID-19 pandemic introduced citizens around the world to a financial landscape where physical access to banks was further limited.

Maxim Manturov, Head of Investment Research at Freedom Finance Europe, says: “To support the economy, most countries adopted stimulating policies, which brought both the loan and deposit interest rates to the historic lows. As an alternative to low-rate deposits, many started investing their savings into stock markets, which posted significant gains last year despite the lockdown and the production slump.”

Let’s take a deeper look into how fintech’s swift evolution may disrupt the brick and mortar banking landscape:

Fintech Driving Change

The term ‘fintech’ refers to technologies that have been developed to rationalize, digitalize and optimize traditional financial services filling the gap in traditional payment systems. Fintech has the power to facilitate services provided by payment systems as it enables more transparent and accurate transactions owing to vast technology opportunities.

It’s worth noting that due to being entirely digital, fintech services tend to be delivered at a lower price, which enables users to access cheaper, more affordable and unified services.

Oftentimes, banks have been considered as major players in payment transactions, but today traditional banking systems are increasingly giving way to fintech in terms of the high cost of conducting transactions and because of system inconsistencies.

Fintech companies aim to organise the payment process not only from the point of view of cheapness and profitability but also from the point of view of convenience and unification. Particularly taking into account that traditional banking services happen to have shortcomings in the new technology sphere, the notion of fintech integrating with banks helps to offer a solution where a bank provides fintech services through cooperation. This integration of banking services is vital for this – while banking services can offer real-time financial management on a regular basis, fintech brings innovation and disruptive technology to the table.

For instance, there are still unbanked areas where access to brick and mortar financial institutions is still challenging for individuals. Fintech can act as a door to banking services for areas of the world that are deprived of sufficient banking infrastructures and can connect users with services like digital wallets, cashless transaction and wealth management. One such example can be found in an initiative by the World Food Programme where Syrian refugees have been set up with a cashless payment network to help them buy the necessary food for their families.

Fintech can also help financial institutions to better embrace digital currencies like cryptocurrencies, and to facilitate more payments being made through non-fiat denominations of finance. With the recent listing of Coinbase on the New York Stock Exchange, the world of crypto has enjoyed a period of further validity and perceived acceptance within more traditional banking. With payment giants like PayPal and Stripe incorporating the likes of Bitcoin into its fintech functions, we can see further indications of how much more powerful fintech can be compared to brick and mortar banking – but is there still room for local banks on the high street?

Does Fintech Spell the End for Brick and Mortar Banking?

Industry insiders have long been concerned about the role fintech have been playing in the world of banking and whether or not they will ultimately replace traditional financial institutions. This fear was exacerbated by the recent introduction of the People’s Bank of China Fintech Development Plan which looked to accelerate the accommodation of digital financial services in the country. But could fintechs actually spell the end of traditional banking?

To address this properly, let’s address what finance actually is. The purpose of finance is to realize the optimal distribution of capital across time and space amid uncertainties and to serve the real economy and maximize social utility.

One big barrier to this can be found in adverse selection through a lack of information and the emergence of ethical issues. Finance should exist to identify and price risks. All technologies that are developed should be intent on helping to better understand customers and their willingness, and ability, to pay – while pricing them accurately.

With this in mind, traditional banks have an advantage in terms of capital costs, while fintechs are competitive in terms of operating costs. While some may believe that the cost of customer acquisition online was low, there’s evidence that the process is actually regularly more expensive than offline acquisition.

Fintechs are naturally innovative and in tune with the development of the internet. They have regulatory arbitrage to leverage and enjoy first-mover advantages. Their ability to offer standardized financial products while utilizing long-tail marketing gives them something of competitive advantage. However, brick and mortar financial institutions can offer a more natural monopoly over in-person finance, as well as much greater levels of expertise and capital strength – they also boast stronger and more loyal customer bases.

With this in mind, their strengths lie in the creation and sale of bespoke financial products to a sprawling customer base. With this in mind, we may ultimately see a more adaptive relationship between the two approaches to finance in the future – with fintech innovations complementing brick and mortar banking.

The Road Ahead for Fintech

It’s difficult to gauge exactly what the future holds for technology-led banking. At the turn of the century, it would’ve been almost impossible to predict how internet banking would leverage contactless payments within the space of 20 years.

It’s clear to see that banking branches have a future, although they may become fewer and far between – and they’re likely to take on a different physical appearance than the branches of the past. Alongside other brick and mortar retail stores, it’s likely that customers will crave experience as much as functionality. When most financial transactions are carried out digitally, there needs to be fresh reasons to make visiting branches worthwhile.

Times are changing at a quick pace, and it’s difficult to confidently look into the future. While the road ahead for fintech may come with more twists and turns, it’s clear that this level of innovation will continue to make a positive impact on the world of finance, and this will help to complement the world of brick and mortar banking.

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Source: https://www.fintechnews.org/the-rise-and-rise-of-digital-banking-how-fintech-is-set-to-disrupt-brick-and-mortar-banking/

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Fintech Aspire Reports Reaching $1 Billion in Yearly Transactions Just a Year After Launch

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Y-Combinator-backed Fintech firm Aspire has reportedly managed to reach $1 billion in annualized transaction volumes in just a year since the introduction of its business accounts (in May 2020).

Aspire also revealed that it will be offering a new Bill Pay feature, which will be automating company invoice payment processes by removing the need to perform manual data entry and related reconciliation.

Business owners may easily forward their invoices through email to Aspire’s AI-enabled assistant, which will use optical character recognition (OCR) and deep learning in order to identify the payment information and the date the transaction was completed.

The client then receives a notification to perform a final check and also to approve the transaction for a particular date.

All transfers are able to sync in a seamless manner with widely-used accounting systems integrated with Aspire, such as Xero, Quickbooks, among others.

Clients may also decide to opt in to automatically schedule the payment in order to maximize payment terms and enhance company cash flow.

Aspire provides businesses across Southeast Asia access to various financial products via its comprehensive, all-in-one finance platform. Similar in some ways to Fintech Unicorn Brex in the United States, Aspire aims to provide a  digital and affordable way for small businesses to manage their funds. The company claims its services may be better than those offered by incumbents.

Aspire reportedly provides services to thousands of companies in Southeast Asia. It had recently introduced an incorporation offering in order to serve as the “one-stop shop” across any new business owner’s journey.

Andrea Baronchelli, Founder and CEO at Aspire, stated:

“We are filling a $150 billion demand gap for better, faster, and cheaper financial services for businesses in Southeast Asia.And we will continue to release innovative products targeting growing businesses, such as Bill Pay, to help founders save time and money, and use those resources to grow their business instead.”

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Source: https://www.crowdfundinsider.com/2021/05/175207-fintech-aspire-reports-reaching-1-billion-in-yearly-transactions-just-a-year-after-launch/

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Boom in financial tools allowing people to manage money more effectively

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A boom in people using financial tools which help them to manage their money more effectively by sharing their data securely with firms has occurred during the coronavirus pandemic, according to a credit checking company.

Experian said 57% of lenders have adopted “open banking” technology in the past 12 months, helping people manage their finances in more fluid and intuitive ways online.

Open banking allows people to share information about themselves securely with providers using apps and websites, to find products and services that suit them based on their own transactions. This could help people find a better overdraft for their needs, for example.

The number of people choosing to share their data through “open banking” technology has tripled since the start of the Covid-19 pandemic, Experian said.

In February, Experian’s open data platform recorded more than 188 million data-sharing requests, up from 47 million in February 2020.

To read more, please click on the link below…

Source: Boom in financial tools allowing people to manage money more effectively

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Source: https://australianfintech.com.au/boom-in-financial-tools-allowing-people-to-manage-money-more-effectively/

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Senate Votes to Halt True Lender Rule

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The US Senate has voted to nullify the rule issued by the Office of the Comptroller of the Currency (OCC) entitled the National Banks and Federal Savings Associations as Lenders and published on October 30, 2020. The vote in the Senate was largely along party lines with Republican Senators Collins and Rubio crossing over to support the Democrat-sponsored resolution.

This resolution impacts the “True Lender” rule that is of concern for some Fintech lenders which may originate loans in partnership with banks.

In brief, as explained by JD Supra, a nationally chartered bank is subject only to the usury limits of the bank’s home state when issuing loans. Each state sets these lending limits independently. Federal law allows banks to apply the interest rates set in the bank’s home state to borrowers in other states. When banks have made loans in partnership with Fintechs, some have argued that the bank is not the true lender, and federal preemption should not apply.

The OCC had attempted to clarify a dicey situation pertaining to lending relationships between banks and third parties, such as Fintechs, that may facilitate access to affordable credit and thus benefit consumers. The uncertainty about the legal framework that applies to loans made as part of these relationships was fogged by the fact that each state has different lending rules. The OCC had said this uncertainty may discourage banks and third parties from entering into relationships, limit competition, and chill Fintech innovation that results from these partnerships, all of which may restrict access to affordable credit.

When the OCC proposed the True Lender clarification, Congressman Patrick McHenry, the Ranking Member on the House Financial Services Committee, issued a  statement in support of the OCC’s move calling it an “important step toward providing clarity to banks and non-banks on the ‘true lender’ doctrine.” McHenry said the OCCs decision would “foster greater innovation in financial services—ultimately leading to greater financial inclusion.”

Now the joint resolution moves onto the House where it is expected to pass.

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Source: https://www.crowdfundinsider.com/2021/05/175246-senate-votes-to-halt-true-lender-rule/

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