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Navigating the minefields of the money transfer landscape

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Ricky Lee

Traditional institutions within the currency exchange and money transfer landscape have long felt the tremors of disruption. In the last 5 years alone, the number of companies transferring money abroad has grown from 35 to 112 in the online space. With more than 100 different exchange rates available for the same currency, it’s little wonder that consumers are finding it difficult to compare rates all at once, let alone navigate their way through the minefield of complex charges and fast-fluctuating rate changes.

Ricky Lee, founder of currency comparison aggregator Find. Exchange shares his insight on how innovative next generation technologies are set to trigger the biggest shift yet in the currency exchange and money transfer world as they cut through the complexities to deliver a faster, safer, and more transparent experience.

With the Personal and SME Business transfer revenue markets valued at £1.1bn and £23bn respectively, there’s real opportunity for businesses young and old to take a significant slice of the money transfer pie.

To succeed in this space, however, there’s no sense in innovating for the sake of innovation: solutions must identify and address the pain points of the user and, utilising the right technology, be able to deliver an experience that meets the demands for convenience, transparency and security.

There have, of course, been important moves to shake up the way things are done on the money transfer scene, as disruptors look to improve costs, transparency and even aesthetics. But the actual underlying technology has not been revolutionary: the same things are being done, just in a different way.

Knowing your customer

The lack of technological innovation in the money transfer space means that businesses sending and receiving money on a daily basis are not only met by high fees but they must also navigate a money transfer minefield in order to achieve the best deal.

Within in a business setting, those who organise international money transfers – whether for accounting purposes, payroll or for travel – need the simplest route to the best deal. With the fast-fluctuation of rates and volatility of the marketplace, achieving the best results can squeeze a company’s time, resources and budgets. And so, it’s possible that these decision makers will default to existing partnerships to alleviate the pressures on time and resource. But in doing so, they don’t solve the cost element of the equation.

By understanding the key challenges businesses face – such as the complexities of comparing transfer provider rates – innovators can develop solutions that remove the friction from the experience. Resultantly, they will be able to offer up a quick and seamless service that alleviates the pressure on their time, resources and budgets.

Meanwhile, from a currency exchange perspective, inconvenience is the major pinch-point for corporate travel planners and business travellers alike – as it is for leisure travellers too. The out-in-the-field delegate is unlikely to want to spend time locating exchange bureaus or sourcing best rates, which are often unfavourably high. Ultimately, they want a seamless business travel experience. This means that the user experience is key. They need information at their fingertips, real time data to help them make the best decisions, and a platform that is fast and easy to navigate.

Therefore, any innovation that works to simplify the process and cut through the confusing layers made up of hidden charges, multiple rates and hard-to-locate bureaus, will immediately elevate the overall experience for the user.

While it may seem a straightforward equation to solve, innovation is struggling to progress with any real momentum – particularly amongst the heavyweights of the industry. This is largely due to an increasing shortage of talent.

A paradigm shift
The money transfer market is complicated, and any charge to lead the way needs to be spearheaded by the best. The problem for some of the largescale institutions is that ‘the best’ are increasingly attracted to the agile, in vogue and dynamic practises associated with startups.

The likes of Western Union, for example, have had more than seven years to evolve and catch up with innovation that’s happening across sectors, especially in terms of blockchain developments. But though they may be actively seeking ways to expand, progression hinges on retention of the best talent.

The changing patterns in consumer behaviour add another challenge to the innovation problem, as the marketplace is almost duty-bound to shift with every rise and fall: consider the evolution of players such as Revolut and Monzo, which started off as travel and payment cards, respectively.

Crucially, the move towards mobile has engendered a new paradigm shift that is forcing financial service companies to change: people can work from anywhere – home or away; accounts are multi-currency, meaning payroll has had to change. The mobile revolution isn’t new, but the prevalence of mobile for the banking customer is undeniably shaping the course of innovation.

As customers, we are time-poor and want to be able to organise transfers from our pocket without having to visit a local branch. But poor mobile offerings and antiquated, sluggish transfer systems from the larger players just aren’t meeting these needs. If transfer companies can’t innovate quickly enough and their mobile offering is insufficient, customers – who are increasingly promiscuous by nature – will leave. Ultimately, any innovation now has got to be user-centric. It’s not about reinventing the wheel, it’s about reinventing the customer experience.

While challenger banks are an attractive, cheaper, mobile-friendly option, they simply can’t compete with the customer experience of stalwart players like Lloyds Banking Group. Imagine, as a customer, you lose your card. Lloyds has the capability to respond immediately, asking questions after they have provided a solution to the customer. With challenger banks, you could have a three-month fight on your hands to reach a near-satisfactory result.

There’s a parallel to be drawn here, relating to the emergence of streamlined models impacting the aviation scene. Ryanair’s popularity, for example, is down to pricing, not product or service, and there are many who will – through necessity or choice – trade customer experience for a cheaper price. But for those who favour experience over price, traditional carriers such as British Airways will win them over. In spite of elevated costs, they can ultimately deliver a better experience because they have the infrastructure and the staff, in place. It’s exactly the same in the banking world.

Building solutions block by block

While some players have moved to disrupt the currency market, the actual ground-breaking technological transformation has been limited. But with the introduction of blockchain technology, the financial services ecosystem, in particular, is on the precipice of a new era. Even in its relative infancy, blockchain technology is making its mark and bringing with it the promise of real transformation.

Created initially as the mother of the payments world, bringing with it the arrival of the P-2-P payment process, it quickly became apparent that blockchain could be utilised across many other industries. For currency exchange, it’s the next logical step towards delivering a transparent, secure and fast service.

We are entering a new age of development and integration and we’re at the very start of the blockchain story; no one really knows what the next chapters will hold. What we do know is that next-gen technology like this will be a game-changer.

Moreover, with privacy high on the agenda – a call that has given rise to the GDPR revolution – the timing for blockchain technology implementation couldn’t be better.

Blockchain is all about getting data from A to B as quickly and safely as possible, and this ties in well with the globalisation we are seeing. Blockchain is the perfect product to maintain the momentum of globalisation: at its core, it’s about communicating securely, rapidly and transparently.

The start of something

But there’s no doubt that it will take time to implement any meaningful end-to-end solutions. And traditional banks that are weighed down by antiquated legacy systems, not to mention the sometimes more out-dated thinking from within its top tiers, will find it hard to keep up. This is where dynamic startups will come into play.

Collaboration presents a fantastic opportunity for startups, more so than competing with the giants of the industry which have decades of experience and credibility behind their brands. However, the growth in startup culture, spurred on by proven companies such as TransferWise and Revolut, has authenticated startups as just that – the start of something. As such, their potential, hunger and ambition is being widely recognised, thus securing them a role in the future of fintech.

And while startups rarely offer an end-to-end solution, they do hold the important advantages of speed and agility, making collaboration an attractive option for both sides. Working together, startups can help more established companies to implement next gen technologies – combined with tried and tested models – to improve user experience and enhance functionality.

This amalgamation of the Davids and Goliaths of the financial services world could induce a powerful transformation of the fintech ecosystem as we know it, as they cut through the residual complexities and answer the demands emanating from shifting consumer behaviour and a rapidly expanding industry.

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Australia says no further Facebook, Google amendments as final vote nears

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Australia says no further Facebook, Google amendments as final vote nears 1

By Colin Packham

CANBERRA (Reuters) – Australia will not alter legislation that would make Facebook and Alphabet Inc’s Google pay news outlets for content, a senior lawmaker said on Monday, as Canberra neared a final vote on whether to pass the bill into law.

Australia and the tech giants have been in a stand-off over the legislation widely seen as setting a global precedent.

Other countries including Canada and Britain have already expressed interest in taking some sort of similar action.

Facebook has protested the laws. Last week it blocked all news content and several state government and emergency department accounts, in a jolt to the global news industry, which has already seen its business model upended by the titans of the technological revolution.

Talks between Australia and Facebook over the weekend yielded no breakthrough.

As Australia’s senate began debating the legislation, the country’s most senior lawmaker in the upper house said there would be no further amendments.

“The bill as it stands … meets the right balance,” Simon Birmingham, Australia’s Minister for Finance, told Australian Broadcasting Corp Radio.

The bill in its present form ensures “Australian-generated news content by Australian-generated news organisations can and should be paid for and done so in a fair and legitimate way”.

The laws would give the government the right to appoint an arbitrator to set content licencing fees if private negotiations fail.

While both Google and Facebook have campaigned against the laws, Google last week inked deals with top Australian outlets, including a global deal with Rupert Murdoch’s News Corp.

“There’s no reason Facebook can’t do and achieve what Google already has,” Birmingham added.

A Facebook representative declined to comment on Monday on the legislation, which passed the lower house last week and has majority support in the Senate.

A final vote after the so-called third reading of the bill is expected on Tuesday.

Lobby group DIGI, which represents Facebook, Google and other online platforms like Twitter Inc, meanwhile said on Monday that its members had agreed to adopt an industry-wide code of practice to reduce the spread of misinformation online.

Under the voluntary code, they commit to identifying and stopping unidentified accounts, or “bots”, disseminating content; informing users of the origins of content; and publishing an annual transparency report, among other measures.

(Reporting by Byron Kaye and Colin Packham; Editing by Sam Holmes and Hugh Lawson)

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GSK and Sanofi start with new COVID-19 vaccine study after setback

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GSK and Sanofi start with new COVID-19 vaccine study after setback 2

By Pushkala Aripaka and Matthias Blamont

(Reuters) – GlaxoSmithKline and Sanofi on Monday said they had started a new clinical trial of their protein-based COVID-19 vaccine candidate, reviving their efforts against the pandemic after a setback in December delayed the shot’s launch.

The British and French drugmakers aim to reach final testing in the second quarter, and if the results are conclusive, hope to see the vaccine approved by the fourth quarter after having initially targeted the first half of this year.

In December, the two groups stunned investors when they said their vaccine would be delayed towards the end of 2021 after clinical trials showed an insufficient immune response in older people.

Disappointing results were probably caused by an inadequate concentration of the antigen used in the vaccine, Sanofi and GSK said, adding that Sanofi has also started work against new coronavirus variants to help plan their next steps.

Global coronavirus infections have exceeded 110 million as highly transmissible variants of the virus are prompting vaccine developers and governments to tweak their testing and immunisation strategies.

GSK and Sanofi’s vaccine candidate uses the same recombinant protein-based technology as one of Sanofi’s seasonal influenza vaccines. It will be coupled with an adjuvant, a substance that acts as a booster to the shot, made by GSK.

“Over the past few weeks, our teams have worked to refine the antigen formulation of our recombinant-protein vaccine,” Thomas Triomphe, executive vice president and head of Sanofi Pasteur, said in a statement.

The new mid-stage trial will evaluate the safety, tolerability and immune response of the vaccine in 720 healthy adults across the United States, Honduras and Panama and test two injections given 21 days apart.

Sanofi and GSK have secured deals to supply their vaccine to the European Union, Britain, Canada and the United States. It also plans to provide shots to the World Health Organization’s COVAX programme.

To appease critics after the delay, Sanofi said earlier this year it had agreed to fill and pack millions of doses of the Pfizer/BioNTech vaccine from July.

Sanofi is also working with Translate Bio on another COVID-19 vaccine candidate based on mRNA technology.

(Reporting by Pushkala Aripaka in Bengaluru and Matthias Blamont in Paris; editing by Jason Neely and Barbara Lewis)

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Don’t ignore “lockdown fatigue”, UK watchdog tells finance bosses

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Don't ignore "lockdown fatigue", UK watchdog tells finance bosses 3

By Huw Jones

LONDON (Reuters) – Staff at financial firms in Britain are suffering from “lockdown fatigue” and their bosses are not always making sure all employees can speak up freely about their problems, the Financial Conduct Authority said on Monday.

Many staff at financial companies have been working from home since Britain went into its first lockdown in March last year to fight the COVID-19 pandemic.

One year on, the challenges have evolved from adapting to working remotely to dealing with mental health issues, said David Blunt, the FCA’s head of conduct specialists.

“During this third lockdown, there has been a greater impact on mental well-being, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.”

Bosses should continually revisit how they lead remote teams, he said.

“The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception,” Blunt told a City & Financial online event.

Companies should consider “psychological safety” or ensuring that all employees feel confident about speaking out and challenging opinions.

“We’ve heard varying reports of how successful this has been,” Blunt said.

Pressures in the financial sector were highlighted this month when accountants KPMG said its UK chairman Bill Michael had stepped aside during a probe into comments he made to staff.

The Financial Times said Michael, who later apologised for his comments, had told staff to “stop moaning” about the impact of the pandemic on their work lives.

Blunt was speaking as the FCA next month completes the full rollout of rules that force senior managers at financial firms to be personally accountable for their decisions to improve conduct standards.

There have only been a “modest” number of breaches reported to regulators so far as firms worry about being “tainted” but more cases will become public as sanctions are revealed, Blunt said.

“Regulators won’t be impressed by lowballing the figures.”

(Reporting by Huw Jones; Editing by Mark Heinrich)

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