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The three biggest Fintech challenges facing the industry right now



Brian Harris

In recent years innovations in financial technology have revolutionised the way we engage with our finances and dramatically altered how we manage our money.

Fintech companies are at the forefront of these changes, but disrupting an industry is far from plain sailing, and there are plenty of challenges that need to be tackled this year…


One of the biggest upheavals for UK businesses, including Fintech companies, has been the introduction of the EU’s General Data Protection Regulation (GDPR), with financial firms both new and old having to invest significant time and resources to ensure that they comply with the new laws.

And GDPR is just one of the many regulatory hurdles faced by the financial sector, which (following the crash in 2008) has seen stringent rules imposed on how it’s allowed to operate.

While traditional financial institutions often have whole teams to deal with these hurdles,with smaller Fintech start-ups the burden of compliance can often fall onto a single brave soul who has to shoulder the burden of making sure the company is adhering to all the regulations.

With varied global regulatory environments to contend with, this can prove to be a major headache, especially when regulations fail to keep pace with changes in technology, leaving many start-ups operating in a grey area.

So what can Fintech firms do to avoid running afoul of regularity authorities?

Well, working with the authorities themselves is definitely a good place to start, which can be achieved by getting involved in a regulatory ‘sandbox’.

Some regulators have also begun sanctioning the temporary loosening of restrictions, allowing financial organizations to test new ideas and reducing the initial hurdles faced by start-ups.

However, you should also be ready to scale your compliance team according to your growth and consider pooling resources with other Fintech companies to share some of the burden.

Cyber security

Fending off cyber-attacks in one of the greatest challenges faced by businesses and governments around the world, and given the sensitive nature of the client data they hold, they’re a serious concern for Fintech firms.

With cybercriminals launching more sophisticated and frequent attacks, the number of major data breaches looks set to soar in 2018.

This has seen organisations devote ever more time and money in an attempt to thwart these attacks, with businesses spending an average of $11.7m on cyber security in 2017.

Of course not every Fintech company has that kind of money to throw at the problem. So what can you do to minimise your exposure to cyber-attacks and keep client data safe while keeping ever spiralling costs down?

Well, with traditional cyber security methods becoming unsustainable,you may need to reassess your approach to protecting yourself and your clients from cyber criminals.

To this end it may be time to consider deploying dynamic security solutions such as a ‘Moving Target Defence’ (MTD).

This method helps to frustrate attacks by continually shifting the points of attack and robbing hackers of the static targets they’re familiar with breaching.

MTD has already been deployed by the US Department of Homeland Security as well as major European banks and many more business are expected to follow in 2018.

Retaining the human touch

Fintech is defined by its ability to disrupt the financial sector and upset the status quo, but this may not always be for the better.

One key area in which Fintech firms can fall behind traditional financial companies is through the absence of the ‘human touch’, with their operating models often leaving clients to feel like they are dealing with some faceless entity.

And with the use of AI and machine learning on the rise this issue only looks to become more prevalent.

This can leave many Fintech start-ups struggling to persuade clients, particularly older clients, to abandon their traditional banks.

Furthermore, the lack of a ‘human touch’ touch can have disastrous consequences if your company relies too much on technology – just look at TSB’s recent IT meltdown and how it left thousands of customers without access to their accounts.

But what steps can Fintech companies take in order to avoid becoming the soulless financial institutions they set out to beat?

For starters, keeping your customers’ needs and experience at the heart of every new technology you adopt should be paramount. The aim of the game is always to make things easier for the consumer and to offer them a level of service and support they wouldn’t get elsewhere.

Being able to pick up the phone and speak to a real person is an essential selling point for some consumers, so Fintech firms should be prepared to cater for this.

Cost considerations really do come into play here, and for many businesses offering customers a personal service isn’t always practical. But ensuring that you offer at least some level of direct engagement and that you have a dedicated team to support customers when something goes wrong helps lead to a more seamless customer journey.

While the road ahead will not always be easy when it comes to Fintech, forward planning and constant research can help companies overcome the obstacles!


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Oil set for steady gains as economies shake off pandemic blues – Reuters poll



Oil set for steady gains as economies shake off pandemic blues - Reuters poll 1

By Sumita Layek and Bharat Gautam

(Reuters) – Oil prices will stage a steady recovery this year as vaccines reach more people and speed an economic revival, with further impetus coming from stimulus and output discipline by top crude producers, a Reuters poll showed on Friday.

The survey of 55 participants forecast Brent crude would average $59.07 per barrel in 2021, up from last month’s $54.47 forecast.

Brent has averaged around $58.80 so far this year.

“Travel and leisure activity look set to catch up to buoyant manufacturing activity due to the mix of stimulus, confidence, vaccines, and more targeted pandemic measures,” said Norbert Ruecker of Julius Baer.

“Against these demand dynamics, the supply side is unlikely to catch up on time, leaving the oil market in tightening mode for months to come.”

Of the 41 respondents who participated in both the February and January polls, 32 raised their forecasts.

Most analysts said the Organization of Petroleum Exporting Countries and allies (OPEC+) may ease current output curbs when they meet on March 4, but would still agree to maintain supply discipline.

“With OPEC+ endeavouring to keep global oil production below demand, inventories should continue falling this year and allow prices to rise further,” said UBS analyst Giovanni Staunovo.

Oil demand was seen growing by 5-7 million barrels per day in 2021, as per the poll.

However, experts said any deterioration in the COVID-19 situation and the possible lifting of U.S. sanctions on Iran could hold back oil’s recovery.

The poll forecast U.S. crude to average $55.93 per barrel in 2021 versus January’s $51.42 consensus.

Analysts expect U.S. production to rise moderately this year, although new measures from U.S. President Joe Biden to tame the oil sector could curb output in the long run.

“A structural shift away from fossil fuels” may prevent oil from returning to the highs of previous decades, said Economist Intelligence Unit analyst Cailin Birch.

(Reporting by Sumita Layek and Bharat Govind Gautam in Bengaluru; Editing by Arpan Varghese, Noah Browning and Barbara Lewis)

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Japan’s jobless rate seen up in January due to COVID-19 emergency measures – Reuters poll



Japan's jobless rate seen up in January due to COVID-19 emergency measures - Reuters poll 2

TOKYO (Reuters) – Japan’s jobless rate is expected to have edged up in January as service industry businesses suffered renewed restrictions on movement to fight spread of the coronavirus in some areas, including Tokyo, a Reuters poll of economists showed on Friday.

While industrial production activity picked up in Japan, emergency curbs rolled out last month such as asking restaurants to close early and suspending the national travel campaign hurt the jobs market, analysts said.

The nation’s unemployment rate likely rose 3.0% in January, up from 2.9% in December, the poll of 15 economists found.

The jobs-to-applicants ratio, a gauge of the availability of jobs, was seen at 1.06 in January, unchanged from December, but stayed near September’s seven-year low of 1.03, the poll showed.

“As the impact from the coronavirus pandemic prolongs, it is hard for firms, especially the service sector, to expect their business profits to improve,” said Yusuke Shimoda, senior economist at Japan Research Institute.

“So, their willingness to hire employees appear to be subdued and it is difficult to see the jobs market recovering soon.”

Some analysts also said the government’s steps to support employment and existing labour shortages will likely prevent the jobless rate from worsening sharply.

The government will announce the labour market data at 8:30 a.m. Japan time on Tuesday (2330 GMT Monday).

Analysts expect the economy to contract in the current quarter due to the emergency measures to counter the spread of the disease.

(Reporting by Kaori Kaneko; Editing by Simon Cameron-Moore)

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China’s economy could grow 8-9% this year from low base in 2020 – central bank adviser



China's economy could grow 8-9% this year from low base in 2020 - central bank adviser 3

BEIJING (Reuters) – China’s gross domestic product (GDP) could expand 8-9% in 2021 as it continues to rebound from the COVID-19 pandemic, Liu Shijin, a policy adviser to the People’s Bank of China, said on Friday.

This speed of recovery would not mean China has returned to a “high-growth” period, said Liu, as it would be from a low base in 2020, when China’s economy grew 2.3%.

Analysts from HSBC this week forecast that China would grow 8.5% this year, leading the global economic recovery from the pandemic.

If 2020 and 2021’s average GDP growth is around 5%, this would be a “not bad” outcome, said Liu, speaking at an online conference.

China is set to release a government work report on March 5 which typically includes a GDP growth target for the year.

Last year’s report did not include one due to uncertainties caused by the coronavirus. Reuters previously reported that 2021’s report will also not set a target.

(Reporting by Gabriel Crossley and Muyu Xu; Editing by Sam Holmes and Ana Nicolaci da Costa)

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