Fintech Industry Insights Archives - Page 2 of 4

A desk with calendars, symbolizing 2021 and its fintech industry developments

The Fintech Year of 2021 – An Industry Recap

January 24, 2022April 30, 2024 Christoph Laurer Leave a comment

Writing a 2021 recap of fintech has been a tough call. No misunderstandings here: A lot has happened in the industry. But we have gotten so used to the future of payments being both digital and mobile (and some would throw a decentralized in there, too). Long familiar talking points continue rotating in the press:

Embedded Finance keeps breaking through.
BigTech companies still follow their payment ambitions.
Invisible payments in mobile and online payment remain attractive for customers.
Embracing Open Banking is significant for all financial players.
The promises of Artificial Intelligence await around the corner.

So what is to write, when we can expect all of this to define the financial industry in the next years? Well, the devil will be in the details: How will those factors play out on the level of specific target groups, use cases or nations? How is the fintech industry holding up as a whole? And what happened in the crypto sphere?

You see, there still is a lot we can talk about…

Vertical Banking: Why Banking for the Niche Is a Growth Market

November 18, 2021November 18, 2021 Christoph Laurer Leave a comment

Imagine a bank. What does it look like to you?

We assume that most of you reading this would picture it as a building. Perhaps with a sleek, dark blueish glass front. Perhaps with towering pillars reminiscent of classic empires. Definitely with ATMs and clerks giving out cash, taken from underground vaults.

But let’s be honest here: Nothing of that represents modern banking services. Since the introduction of online banking and smartphones, banking is no longer confined to a physical place such as a bank building. Banks become platforms: Nor more need for the branch offices of the financial giants. What’s more Open Banking initiatives make SME banking easier, leaving much room for the smaller, more focussed financial institutions.

Those institutions are the domain of the so-called Vertical Banking. Providers engaging in this form of banking cater to a specific customer niche that larger financial houses and neo-banks don’t address as purposefully. But what do those niche banks look like and what role will vertical banking play in the future?

We start with the basics.

A women scanned thoroughly, symbolizing know-your-customer procedures

What is KYC: An Overview for Fintech Companies

September 30, 2021October 29, 2021 Christoph Laurer Leave a comment

KYC, meaning Know Your Customer or Know Your Client, refers to the processes conducted to verify the identity of a customer and assess the risk of the business relationship with them.

KYC is a crucial regulatory requirement for fintech companies and other institutions with financial responsibilities (like banks, credit institutions and insurance providers). Laws and regulations oblige those actors to validate the identity documents their clients provide. That’s equally true if the clients in question are legal entities instead of persons. KYC also requires companies to evaluate the clients’ financial status and monitor their monetary accounts for suspicious transactions.

The goal: Adhere to Anti-Money Laundering (AML) and Countering the Financing of Terrorism regulations, prevent fraud and constrain the access of users, who don’t fulfil certain standards of credibility.

But Know Your Customer policies are not just boundaries. They also act as competitive factors. KYC yields insightful data on one’s own services and customers.

It thus helps establish a reputation as a secure and trustworthy company as well. And trust is likely the most valuable asset for any financial business today.

So it’s time for a deeper look into the meaning and definition of KYC, its chances and its challenges.

This Know Your Customer Introduction for Fintechs Contains:

A definition of KYC
A discussion of key KYC-related concepts such as AML or EDD
An overview of legacy KYC procedures and their modern counterparts
A list of typical challenges fintech companies face with KYC

Now, shall we?

A hand holding a handy, on which a stock market app is running, representing the SPAC investment type

Opinion: What the ICO Hype Can Tell Us About SPACs

May 25, 2021May 25, 2021 Christoph Laurer Leave a comment

Hypes are a good thing. No, think about it: They generate attention for products, activities and ideas. And where there is attention, there is scrutiny, too. The humming of the mainstream buzz makes us turn heads and observe closely where the noise is coming from.

Matthias Gall, co-founder of trimplement — Matthias Gall, co-founder at trimplement, analyses the potential and possible drawbacks of Special Purpose Acquisition Companies.

For the hype-sensitive stock market, this has proven a boon in many cases. Wall Street is loud, and the more volume an investment trend generates, the more it will catch regulators’ interest – besides that of eager venturers. And currently, one investment trend generating much noise is that of SPACs.

SPACs (short for Special Purpose Acquisition Companies) stood on the sidelines of the stock markets for a few decades. But in recent years, they made a comeback in the investment mainstream – mostly thanks to the web. And there, I could not help but think of another social-media-driven hype of the 2010s: ICOs.

In fact, SPACs already show the same signs of overvaluation and ultimately disintegration that have befallen ICOs a few years back. But will SPACs go down the path of the ICO?

In this article I will try to answer this question and a few more, like:

What are SPACs?
Why are they popular?
What are their risks and disadvantages?
Is the SPAC hype comparable to the ICO hype?

Okay then, here goes: SPACs, the specifics…

Opinion: The NFT Craze on the Art Market

March 25, 2021April 26, 2024 Natallia Martchouk Leave a comment

Intro

trimplement co-founder Natallia Martchouk shares her thoughts about the NFT-based art

Everyone and his dog have been talking and writing about NFT (non-fungible tokens) in the last couple of months. I don’t know where exactly this hype is currently coming from. NFT is not a new concept, it has been around for a couple of years already.

Back in February 2019, I wrote an article about different use cases of blockchain technology in art, which also mentions a couple of older non-fungible token projects like Crypto Kitties or Rare Pepe Trading Cards, so-called digital collectibles. In October 2019 we even started our very own NFT project Value Manifesto together with the art historian Timo Niemeyer, mechanical engineer Matthias Frank and producer of Nixie Tubes Dalibor Farny.

So, nothing new under the sun. But suddenly everybody is talking about the NFTs and NFT-based art is being sold for tens of Millions of dollars. It looks like the concept of certification of art ownership on the blockchain is suddenly lightning-fast going mainstream. However, what currently happens in the art market, rather reminds me of the famous dot-com bubble at the end of the 1990s. Let’s have a closer look at the events of the past few months.

A robot hand holding a vintage ladies' wallet, representing electronic wallets or e-wallets, respectively

What Is An E-Wallet – Definitions and Technical Distinctions

February 18, 2021April 26, 2024 Christoph Laurer Leave a comment

E-wallets are software programs which securely store data. This data is needed to enable the wallet owner to conduct payments online or at points-of-sale. And they do so by use of a specific device.

That’s as close to an encompassing definition of e-wallets, or electronic wallets respectively, as we will probably get. But it’s also just the surface of what electronic wallets – sometimes also called digital wallets or (obsoletely) cyberwallets – can do. Over the last decade, e-wallet technology has found application to a variety of use cases. This article will cast a light on the term E-wallet, especially in the context of online payments. In the following paragraphs you’ll find:

Definitions of certain types of e-wallets
An overview of their common functionalities
A breakdown of e-wallet-based payment
An outlook on their role in the future of payments and e-commerce

Two hands with medical gloves handing over a banknote, representing fintech during the corona year of 2020

How 2020 Changed the Fintech Industry – Trends and Developments

January 12, 2021January 24, 2022 Christoph Laurer Leave a comment

What a year… good thing, we have a new one in replacement.

Last December, when putting together our annual industry recap articles (you can find some of them here if you are in for nostalgia), we could not have guessed that the fintech scene would be on the brink of profound change. Many predictions, fintech and banking experts had made for 2020, did not occur – or did not occur for the reasons that we assumed would provoke them.

Everything considered, though, the financial industry got off cheaply in 2020, when compared to other industries. Some branches could even step up their game.

The question now is, if the fintech trends of 2020 will continue in 2021 or if they will “return to form”, once the restrictions in worldwide trade, business and retail loosen again. A look in the rear-view mirror will give us some implications.

An illustration of an hourglass with coins in it, representing the traditional financial system and its history

The History of the Financial System

August 11, 2020April 30, 2024 Natallia Martchouk Leave a comment

Introduction

We all are used to living in the world of centralized banks and institutions that govern finance – also known as the old economy in the crypto and fintech scene. In fact, many people cannot imagine that the financial system could work differently. They simply take this existing system as the given and best option.

But is this the case? Or are there good reasons why there is a need for new paradigms like the growing new area of decentralized finance? Let’s talk about some historical milestones in the development of the financial systems of the old economy, before examining its disadvantages.

The Old Economy: History, Status Quo and Risks

Money Makes the World Go Round

Let’s start at the very beginning and go through some basic concepts. The financial story of humankind starts with the invention of money.

A wallet, money and a computer cooling system, symbolizing the rapid real-time payments of SCT Inst

From SCT Inst to EPI – How European Banking Is Changing

August 5, 2020April 30, 2024 Matthias Gall Leave a comment

Having followed the European financial press in recent years, chances are you stumbled across the term SCT Inst. This seven letter abbreviation hints at an ambitious banking project that has sharpened the competitive edge of the European financial market: Instant, multi-national payments.

The SCT Inst scheme was introduced to enable rapid, real-time payments between banks and financial institutions located in different European countries. As such, SCT Inst acts as a stepping stone for more banking projects bound to happen further down the timeline (like the European Payment Initiative or EPI).

As you are reading this, SCT Inst has already taken hold in banking. But still, banks can feel the challenges it has presented to them.

Let’s see what we are dealing with.

Two businessmen lining out a payment gateway for their online marketplace and other platforms of the platform economy.

Empowering the Platform Economy

May 19, 2020March 1, 2023 Christoph Laurer Leave a comment

aye4fin Managing Partner Thomas Tittelbach, presenting 5 important topics when creating payment gateways on a business level. — Thomas Tittelbach, Managing Partner at aye4fin gives you a detailed overview of how to approach building a payment gateway from a business perspective.

E-commerce is a growing market – but it’s not taking place entirely within single online shops. By far not. Online marketplace environments have cemented their presence all over the web, be they specialized in dealing with certain types of goods or all-in-one digital warehouses. In addition to retail, service platforms and even comparison portals have found their niches as well. In short: We live in the age of the platform economy – driven by smooth-flowing online payment solutions.

Yet sometimes the last part is more wishful thinking than reality. Payment processing requires a payment gateway designed for the specific transaction flows, which occur in marketplaces. And if you want to design such a well-functioning solution yourself, you can turn it into a business case on its own.

Of course, there are things to keep in mind, from a business perspective. In this second part of our Article Series on Payment Gateway Building, we give you an overview of those. Here are five topics to consider when building payment gateways for marketplace platforms.