There’s no doubt that the Internet of Things (IoT) is here to stay, but how can the banking industry make the most of the technology and what does it need to be aware of? Anton Agranovsky, co-founder of #MetaHash, looks at this ever evolving and exciting time.
What is IoT in 2018?
The Internet of Things is going from strength to strength and showing with no signs of slowing down.
Almost any product can be now be transformed to an IoT object – as long as it can be connected to the internet and controlled through it, the possibilities are endless.
Some industries have really embraced this technology such as smart home and wearables s0 meaning it’snow possible to control your kettle from an app, turn your lights on before you get home, track your sleep and steps and detect gas leaks, all of which have contributed to making life easier and healthier. But are other industries lagging behind?
IoT and the financial industry
The financial industry hasn’t been quick off the mark with IoT technology however more recently it’s starting to invest in it, offering customers services to help improve their experiences. Many banks are now developing apps that work with wearable devices with the likes of FitPay and Barclays leading the way by creating bPay and launching the world’s first contactless bar helping you get that perfect pint in just 60 seconds. Technology that helps get you a beer quicker has to be a good thing but it’s also great for the pub and the bank.
Banks are aware that customers are crucial to their survival and realise the potential the IoT has in creating more engaging and individual customer rewards as well as identifying opportunities for cross selling. Much like Netflix recommends TV shows you may like based on your viewing history, banks can now offer personalised offers or discounts for customers favourite retailers, restaurants and so on. This approach is one that not only benefits the customer but other businesses.
IoT outside of the financial industry
However, it’s worth considering the impact that the IoT has on the financial services when you consider the breadth of its forecasted capabilities.
With the suggestion being that appliances will be able to order food when we run out direct with the store, the ability to bulk order with neighbours to save money and for drones to become the new method of delivery, there are now a number of ways bank details can be vulnerable with the IoT.
What are the challenges to IoT and banking?
For both customers and banks security breaches and fraud remain the biggest concern with the evolution of financial services. The more apps and take up companies have to these services the more customers details are vulnerable.
In addition, whilst applications are improving experiences and adding benefits to the customer and companies alike, for individuals having a large number of apps to ‘make life easier’ that need constant updating can have the reverse effect.
What’s needed is a single point of control or an orchestrator that takes in all of those individual apps and their various forms and functions. I believe this is what’s really needed for IoT to reach its full potential and move forward. This is now our goal at #MetaHash to make this happen.
Let’s consider a solution that allows us to dictate the rules of what an app can or can’t do, one that can’t be corrupted and most importantly, where rules are standardised for all the devices. The situation changes dramatically and becomes much more appealing for everyone.
The solution is dApps (decentralised apps) which are decentralised applications or protocols that use the blockchain technology, to create a platform for developers. These enable the right privileges for financial operations to the devices and ensure everything is safe from external security threats. Moreover, given the unified data space, the previously disconnected devices merge into an environment for interaction, thus creating opportunities for communication and mutual exchange of the goods.
From the point of view of risk analysis, the orchestrator however still remains a SPOF (Single Point of Failure), thus putting the entire environment in danger. There are many reasons for why a common centralised system such as iOS or MiHome has its faults and risks.
- Closed software
This can mean potential backdoors, zero-day vulnerabilities, trojans, etc. These remain a threat as in general we have to blindly trust the closed code systems. On the other hand, the dApps are open source and are repeatedly validated by the community.
- Fault tolerance
Once broken, the failover may not even exist. DApps are distributed, thus will work 24/7 with no exception.
- Delayed integration
Proprietary communication protocols impede integration as well as lead to data model version conflicts. Blockchain, however, executes a uniform singular API, effectively making sure that all manufacturers follow the same set of rules, since you cannot change a blockchain.
- Transaction transparency
Transactions transparency of closed orchestrators is questionable. As a rule of a thumb you need to be 100% guaranteed that no vendor is illegitimately charging you a penny for each operation behind your back. And only the blockchain approach allows a perfect transparency for every operation and audit of every transaction.
What are the drawbacks?
The fundamentals of using dApps are strong however most popular blockchain protocols don’t provide real time interactions and also have large fees attached to them. However, new entries to market such as MPoS/DPoS-based blockchain platforms (as opposed to a classic Proof-of-Stake) allow for a low latency and low fee transactions that can even compete with modern centralised transaction systems since the bandwidth may reach as high as 100,000 transactions per second.
Summarising the above, the IoT is here to stay, but to really reach its full potential we need to ensure that we are putting the right technology behind them to help them grow. The technology we are working on at #MetaHash safeguards from breaches and also means it’s more convenient for the user – it’s a win, win.
#MetaHash is a blockchain-based digital asset exchange network and decentralized real-time application platform. The versatile network utilizes artificial intelligence (AI) to synchronize cross-continental nodes to create an optimal map of the network, based on latency rates. The technology then redistributes the data accordingly, harnessing the full power of the entire network, enabling unprecedented processing speeds capable of five billion transactions per day, at no more than three seconds for approval of each transaction.
The platform, based on its unique #TraceChain protocol, offers unparalleled speed, security, and decentralization at the lowest price per transaction in the history of blockchains. Signaling the future of the distributed web, #MetaHash is among the pioneers of blockchain interoperability, allowing networks to interact and integrate with each other.
Bank of England told to stop buying ‘high carbon’ bonds
By David Milliken
LONDON (Reuters) – A group of British members of parliament said on Monday that the Bank of England should stop buying bonds from businesses whose activities accelerate global warming.
Britain’s central bank doubled its holdings of corporate bonds to 20 billion pounds ($27 billion) last year as part of efforts to support the economy through the coronavirus pandemic.
The House of Commons’ Environmental Audit Committee – which looks at public bodies’ impact on global warming – said buying bonds from firms such as energy companies with high carbon emissions contravened government goals to reduce global warming.
“The Bank must begin a process of aligning its corporate bond purchasing programme with Paris Agreement goals as a matter of urgency,” the committee’s chairman, Philip Dunne, wrote in a letter to BoE Governor Andrew Bailey.
The parliament committee has no formal power over the BoE, which is operationally independent, but finance minister Rishi Sunak could potentially change the BoE’s remit to require a greater focus on environmental issues.
Britain will host the global COP26 climate summit in September and Dunne said the BoE should set a good example.
Bailey said in July that the central bank would review its corporate bond holdings once the coronavirus pandemic was over, but said the BoE was right to provide financial support to a wide range of businesses in an economic emergency.
The BoE holds sterling corporate bonds roughly in proportion to the amount issued on markets.
This means 19% of bonds it holds were issued by electricity companies, 6% by gas companies and 3% by other energy companies, while 11% were issued by industrial and transport businesses that are often energy-intensive too.
Bailey has said financial institutions such as insurers need to pay greater attention to environmental risks and said a green ‘stress test’ of their business models to take place in June.
(Reporting by David Milliken, editing by Andy Bruce)
Crown Agents Bank names Bhairav Trivedi as CEO Designate
UK-regulated bank appoints fintech-leader to complete its digital transformation
London: Crown Agents Bank is pleased to announce the appointment of Bhairav Trivedi as CEO Designate. His appointment is subject to the usual regulatory confirmations in due course. Bhairav and current Group CEO Albert Maasland will jointly oversee the transition.
Bhairav joins Crown Agents Bank as it completes its comprehensive modernisation and transformation programme, becoming a digitally-enabled, globally-focused payments and FX specialist for frontier and emerging markets. He brings over 30 years’ experience in financial services, with a core focus on digital payments, cross-border remittances and fintech development. His previous roles include that of Group CEO of Network International Payment Solutions, a UAE-based payments provider for the Middle East and Africa. He has been President and Chief Operating Officer of Sigue Global Services Ltd., a global moneytransfer company, and was Managing Director, Global Head of Remittance Services at Citi’s
Global Transaction Services from 2008 to 2010. He also founded PayQuik (later acquired by Citi) and has worked at McKinsey and Company, Fair Isaac and Providian Bancorp. He joins us after a nine-month stint as Group CEO of Finablr, having been appointed to oversee the sale of this LSE-listed payments provider, which was successfully completed in December (with Finablr sold to Prism Advance Solutions).
“I am delighted to be joining Crown Agents Bank at such an important moment in its development,” said Bhairav. “Albert Maasland has done a fantastic job to lead the bank towards its stated objective of becoming a leading provider of digitally-enabled FX and payments for emerging and frontier markets. Our goal moving forward, as an institution, is to continue to expand the business in the markets we serve while providing our customers with fully compliant, state of the art products to meet their needs. I am honoured to now play my part in this journey.”
Albert was appointed a non-executive director of the bank when the London-based private equity fund Helios purchased the bank in 2016. In February 2017 he took on the role of Group CEO, overseeing the bank’s transformation.
The bank has become a digitally-enabled and multi-award-winning leader in frontier and emerging market FX, payments and financial services for its unique wholesale client base. Since 2016 the bank has experienced a four-fold increase in revenues, is profitable, with bolstered governance, robust compliance, a stable credit rating and a programme for sustainability and diversity. Thanks in no small part to the 2019 Segovia acquisition the bank now provides a much wider range of digital payment and FX capabilities across a muchexpanded geographical reach: all while maintaining and deepening the bank’s core wholesale client base and focus on frontier and emerging markets.
“I feel now is a good moment to hand over,” said Albert, “especially as – in Bhairav – we have found a new CEO for the Bank with the experience and capabilities to complete the bank’s transition, all in line with Helios’s strong future-vision for transforming what was a traditional bank with deep roots in developing markets into a global, digitally-enabled specialist provider of FX and payment services to some of the fastest growing but often under-served markets around the globe.”
“The appointment of Bhairav points to both continuity – of the transformational process begun by Albert in 2017 – and towards the bank’s final destination as a UK regulated, globally oriented, fully-digital provider of payments, FX and ancillary financial services to some of the most exciting growth markets in the world,” said Jeremy Parrish, Chairman of Crown Agents Bank. “In his ability to take the business to the next level, Bhairav has my personal and full confidence.”
ECB stays put but warns about surge in infections
By Balazs Koranyi and Francesco Canepa
FRANKFURT (Reuters) – The European Central Bank warned on Thursday that a new surge in COVID-19 infections poses risks to the euro zone’s recovery and reaffirmed its pledge to keep borrowing costs low to help the economy through the pandemic.
Having extended stimulus well into next year with a massive support package in December, ECB policymakers kept policy unchanged on Thursday, keen to let governments take over the task of keeping the euro zone economy afloat until normal business activity can resume.
But they warned about a new rise in infections and the ensuing restrictions to economic activity, saying they were prepared to provide even more support to the economy if needed.
“The renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity,” ECB President Christine Lagarde said in her opening statement.
Fresh lockdowns, a slow start to vaccinations across the 19 countries that use the euro, and the currency’s strength will increase headwinds for exporters, challenging the ECB’s forecasts of a robust recovery starting in the second quarter.
Lagarde saluted the start of vaccinations as “an important milestone” despite “some difficulty” and said the latest data was still in line with the ECB’s forecasts.
She conceded that the strong euro, which hit a 2-1/2 year high against the dollar earlier this month, was putting a dampener on inflation and reaffirmed that the ECB would continue to monitor the exchange rate.
The euro has dropped 1% on a trade-weighted basis since the start of the year, but is up nearly 7% over the last 12 months. Against the U.S. dollar, that number rises to over 10%.
Opening the door for more stimulus if needed, Lagarde confirmed the ECB would continue buying bonds until “it judges that the coronavirus crisis phase is over”.
Lagarde also kept a closely watched reference to “downside” risks facing the euro zone economy, which has been a reliable indicator that the ECB saw policy easing as more likely than tightening.
But she signalled those risks were less acute, in part thanks to the recent Brexit deal.
“The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging,” Lagarde said. “But the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk.”
Lagarde conceded that the immediate future was challenging but argued that should not impact the longer term.
“Once the impact of the pandemic fades, a recovery in demand, supported by accommodative fiscal and monetary policies, will put upward pressure on inflation over the medium term,” Lagarde said.
Benign market indicators support Lagarde’s argument. Stocks are rising, interest rates are steady and government borrowing costs are trending lower, despite some political drama in Italy.
There is also around 1 trillion euros of untapped funds in the Pandemic Emergency Purchase Programme (PEPP) to back up her pledge to keep borrowing costs at record lows.
The ECB has indicated it may not even need it to use it all.
“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lagarde said.
Recent economic history also favours the ECB. When most of the economy reopened last summer, activity rebounded more quickly than expected, indicating that firms were more resilient than had been feared.
Uncomfortably low inflation is set to remain a thorn in the ECB’s side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.
With Thursday’s decision, the ECB’s benchmark deposit rate remained at minus 0.5% while the overall quota for bond purchases under PEPP was maintained at 1.85 trillion euros.
(Editing by Catherine Evans)
Dollar pauses its decline on fresh virus worries
By Hideyuki Sano TOKYO (Reuters) – The U.S. dollar stabilised on Monday after a recent decline as fresh worries about...
European lenders exit Amazon oil trade after scrutiny by campaigners
By Brenna Hughes Neghaiwi, Matthew Green and Simon Jessop ZURICH/LONDON (Reuters) – Credit Suisse, Dutch lender ING and France’s BNP...
Asian shares rise as U.S. stimulus plans offset virus woes
By Swati Pandey SYDNEY (Reuters) – Asian shares rose on Monday as concerns over rising COVID-19 cases and delays in...
Oil prices edge lower as COVID-19 lockdown concerns overshadow demand prospects
By Florence Tan SINGAPORE (Reuters) – Oil prices slipped for a second straight session on Monday as renewed COVID-19 lockdowns...
BP’s oil exploration team swept aside in climate revolution
By Ron Bousso LONDON (Reuters) – Nothing escapes the winds of change now sweeping through BP, not even the exploration...
Big Oil hits brakes on search for new fossil fuels
By Ron Bousso LONDON (Reuters) – Top oil and gas companies sharply slowed their search for new fossil fuel resources...
Natural catastrophes cause above-average $100 billion in insurance losses in 2020 – Aon
LONDON (Reuters) – Natural catastrophes resulted in $97 billion in insured losses in 2020, 40% above the average for this...
Bank of England told to stop buying ‘high carbon’ bonds
By David Milliken LONDON (Reuters) – A group of British members of parliament said on Monday that the Bank of...
Global green bond issuance hit new record high last year
By Nina Chestney LONDON (Reuters) – Global green bond issuance reaGlobal green bond issuance hit new record high last yearched...
Online fashion retailer Boohoo to buy Debenhams brand – FT
BENGALURU (Reuters) – Online fashion retailer Boohoo Group Plc is set to acquire collapsed British department store group Debenhams in...