Fintech makes the world go around

Page 1 of 812345...Last »

June 20, 2018  7:55 AM

Fintech takes headlines but Insurtech is a huge opportunity

KarlFl40 Profile: KarlFl40

The term Fintech has become part the lingua franca in these parts. The IT industry that is. But while investors are flocking to the Insurtech sector it doesn’t quite have the same ring as fintech.

But digital technology in the insurance sector has massive potential. Not only is the insurance sector traditionally lethargic in terms of technology, but the very nature of insurance, being a very personal thing, lends itself to personalisation. And this is exactly where start-ups developing apps can help.

Look at indemnity insurance. This is a policy that is tailored to suit a particular situation. For example you might share an access gate with a neighbouring house and while there hasn’t been a dispute in 50 years if somebody buys your house they might want insurance to ensure that in the event of a dispute they are covered financially.

Now imagine being able to create policies quickly via a mobile app. You could have similarly bespoke insurance for all manner of things and buy it at the last minute.  Then there are possibilities around using things like sensor technology to send information to an insurer about things like how somebody drives. The safer they drive the lower the insurance. Imagine, people being offered rewards to drive safely rather than being threatened with fines if they drive dangerously.

But will that be too big brother like? Well it seems that customers are up for it. A survey of 8000 people globally, carried out by Salesforce owned MuleSoft, found 62% of 18 to 34 year  olds said they would be happy for insurers to use their internet of things (IoT) and social media data if it meant lower premiums and a more personalised service.

So there is clear demand but insurers are currently struggling to provide what customers want. As a result the opportunity for insurtech companies to win business in the sector is huge.

For example 58% of consumers believe insurers provide a disconnected experience and 56% would consider changing insurer as the result of receiving a disconnected experience. In the 18-34-year-old age group a massive 61% would consider changing insurers for a more connected experience.

The fact that the younger generation seem to trust insurtechs with their data could mean one of the hurdles to their adoption might cease to be a hurdle in a few years’ time. According to the World Insurance Report 2017 from Capgemini and banking and insurance association Efma, which revealed that 31% of people already receive insurance products through insurtechs, there was less trust of them than traditional players. While 39% trust traditional suppliers, only 26% trust the new arrivals.

Jerome Bugnet, Emea client architect, at MuleSoft said: “The insurance industry is facing major upheaval and disruption with the prevalence of online aggregators and more recent rise of insurtech companies. If they want to remain relevant, insurers need to be ready to engage on their customers’ terms, using modern channels and technologies such as messaging platforms and chatbots. They also need to find new and innovative ways to create more personalised offerings that drive better experiences for their customers.”

 

May 31, 2018  2:19 PM

Fintech professional’s tech predictions: 9- Gamers monitored by businesses and authorities

KarlFl40 Profile: KarlFl40

Here is the ninth in a series of tech prediction for the next five years from a fintech contact of mine.

Previous blog posts in this series predicted: that tech firms will soon need government certificates if producing news content, some of the cyber security risks associated with smart energy meters, the risks associated with sharing data, how social media will fall under increasing government regulation, how the public will build a better understanding of privacy settings on websites, that banks will increasingly become the suppliers of banking services to the big websites, that young people might increasingly disconnect from the connected world due to privacy fears, and how organisations might be forced to reduce the amount of unnecessary information customers have to give online.

This entry looks at how authorities and businesses might use online game platforms to monitor gamers.

Fintech IT professional says: “Online gaming data will continue to be used to monitor users and profile their characters. What kind of games do they play, how good are they and how long do they spend doing it? Governments will build databases linking gaming behaviour to attributes such as social behaviour, intelligence, beliefs, aspirations and other traits throughout players’ lives. Flags may be triggered to alert authorities to specific risks or talents. Games may even be designed specifically to seek and identify particular character traits and alert businesses or authorities to these people. If you need to find the best noughts and crosses player in the country, why not put the game online and see who wins…or perhaps a flight simulator or a war game.”

 

Read part 1 here.

Read part 2 here.

Read part 3 here.

Read part 4 here.

Read part 5 here.

Read part 6 here.

Read part 7 here.

Read part 8  here.


May 22, 2018  1:46 PM

The UK fintech economy will create different pockets of excellence all over the country

KarlFl40 Profile: KarlFl40

The fintech sector in the North is a different shape to its London counterpart with a real shortage of startup businesses. But that doesn’t mean it does not have potential to grow.

While there are many companies in the broader Northern England fintech sector, doing IT for financial services, there is a shortage of the kind of startups that most people associate with the fintech sector. This is according to one of the founders of Fintech North, an organisation that creates events to bring together fintechs in the North of England.

Julian Wells at management consultancy Whitecap Consulting Group, who is also a founder of Fintech North, said the idea was born three years ago when he and some colleagues were asked to set up a fintech event focused on Northern England.

It currently has conferences in Leeds, Liverpool and Manchester and is planning events in Newcastle and possibly Sheffield.

When asked how many fintechs there are in the North of England he said: “I don’t think there is as many as people think.”

“A lot of people when they think of fintech they think of startups but actually fintech is a pretty broad sector, including a lot of established businesses,” he told me.

“The fintech sector outside London is not very startup centric. In the North it is big, with so many financial services organisations, but it is a different shape as there aren’t many startups.”

“What you have in London is a great environment for startups to grow in. There is lots of funding, lots of entrepreneurial events which create a really good environment for an idea to become a business.

“You don’t really get that much outside London. You get little pockets of incubators and accelerators but it is not really the right environment to fire up startups,” he added.

But he said it would not make sense just to replicate London in other cities. “London is the epicentre and all the other centres are looking at where they fit in. There are pockets in different places that offer different benefits.”

“The whole of the UK economy is forming and not everywhere is going to be a centre for startups.”

Wells said in the North particularly in the university cities there is a good base of students graduating with other advantages including lower staff costs and rents.

“It is also less crowded than London so it is easier for fintechs to get conversations going with existing financial institutions,” he added.

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

But he stressed that London has some big advantages. “There is good access to funding and it has a thriving ecosystem

And he said one particular challenge for fintech startups is the fact they have to meet strict regulations from the FCA. “You can’t just have a great idea and turn it into a business. You need people that understand regulations and you get that in London.”


May 16, 2018  10:51 AM

Fintech professional’s tech predictions: 8- Fake personal data.

KarlFl40 Profile: KarlFl40

Here is the eighth tech prediction for the next five years from a fintech contact of mine.

Previous blog posts in this series predicted: that tech firms will soon need government certificates if producing news content, some of the cyber security risks associated with smart energy meters, the risks associated with sharing data, how social media will fall under increasing government regulation, how the public will build a better understanding of privacy settings on websites, that banks will increasingly become the suppliers of banking services to the big websites, and that young people might increasingly disconnect from the connected world due to privacy fears.

This entry looks at how organisations might be forced to reduce the amount of unnecessary information customers have to give on line, as consumers fill in randon details, where permitted by the tech, to save time and protect themselves.

 

Fintech IT professional says: “People may increasingly provide false data online where possible in an attempt to reduce the downstream risk and nuisance caused by providing real data. For example, apps or businesses asking for a date of birth or phone number will often accept any data in the correct format and have no way to verify it. For example, a date of birth 01/01/2001 and a mobile number 00000000000. Obviously a correct email address, payment details and physical address must be provided if you shop online and want the process to work properly. Organisations will be forced by law to stop the practice of making non-essential data collection a ‘required’ field.”

Read part 1 here.

Read part 2 here.

Read part 3 here.

Read part 4 here.

Read part 5 here.

Read part 6 here.

Read part 7 here.


May 15, 2018  10:53 AM

Higher interest rates would tempt me even though TSB has just had an IT disaster

KarlFl40 Profile: KarlFl40

For a challenger bank that uses fintech as a differentiator there are only so many customers it can win. Furthermore the customers that they do win probably have another account, and this is most likely with a traditional bank.

When I look at what’s on offer from the challenger banks I must admit I get excited about the digital services. Some of the functionality available on a mobile today is fantastic.

But after a while it all blends in to one as other banks does the same. And usually if it was not enough of a tease to get me to switch banks anyway. In the meantime my traditional bank has really improved its digital services.

But give me a financial incentive I am all ears. When I read that TSB was offering higher interest rates to customers to make up for the problems caused by the IT disaster, I considered whether I should switch to TSB. I mean the system will get fixed.

This is the challenge for new banks. The traditional players will catch up in tech terms. Okay they have huge cost bases, which are a disadvantage to them, but the new banks aren’t exactly using their low cost base advantage to offer higher interest rates.

I would be interested to hear what people want from challenger banks. Is the new tech enough to win you over or do you want more financial incentives?

With the seven day switching service in place to make it easy for consumers to change current account suppliers, if people have a good reason to change current account providers they will. But so far take up has been very low.

It will be interesting to see what impact the TSB IT problems will have on the banks customer numbers. I expect the interest rate offer might convince people, that were thinking about leaving, to stay put.


May 14, 2018  10:28 AM

Visiting a bank branch made me question my own conceptions

KarlFl40 Profile: KarlFl40

I had to use a bank branch the other day for the first time in over a year, to pay a cheque in.

I thought I would just be able to take a picture of it and send it to my bank, after all I have written stories about banks enabling customers to do this. But I was told it was still in pilot and couldn’t do it.

So off to my local branch, which by the way is closing down in a few months, to pay in my cheque. To my huge surprise I was not the only person there. I had to wait for someone else to be served and during this time somebody joined the line behind me. So in a five minute period on a Friday lunchtime there were three customers. That seems quite a lot.

I must admit the fact that I hardly ever use a branch has turned me into one of those people that doesn’t see the need for a branch. I do like using my mobile phone to bank and do get annoyed of there is something I can’t do on the phone, but this branch visit made me rethink my attitude to the bank branch.

But it is not just because I had hard evidence that people needed the branch but the was something else that made me think. While waiting a delivery of drinking water was made.  A friendly conversation between a bank staff member and the person delivering the water ensued.

I then realised people work here and businesses supply this branch. Take away the branch and somebody loses a job and a small business loses a customer. Are we all getting to c aught up I n the digital revolution?

Furthermore according to recent research by Accenture found that people still want to interact with people when it comes to their daily banking.

In fact 70% of consumers want the ability to raise a complaint with a human adviser, while 63% want to be able to open an account in person. Then 48% want to be shown hands-on how to use the bank’s mobile and online services.

But the survey of thousands of people in the UK also found that the number of consumers who visit branches at least once a month has dropped from 52% to 32%, since 2015.

Not an easy conundrum for banks. They seem to prefer just to cut branches and staff to save money rather than take on this challenge. But are they becoming over reliant on digital and will this diminish some of their traditional advantage.

Peter Kirk, head of Accenture’s financial services distribution and marketing practice in the UK, said “…the number of customers regularly visiting the branch is significantly reducing, but the number of customers regularly using mobile digital service remains static. This could be a concern for the banks as consumers still say they want to have the human touch. The next challenge is how banks provide convenient customer experiences that blend human and digital services to stop them becoming faceless and putting their newly earned trust at risk.”


May 8, 2018  10:49 AM

Fintech professional’s tech predictions: 7- support for disconnecting from the connected world

KarlFl40 Profile: KarlFl40

This is prediction number seven from a fintech contact of mine making tech predictions for the next five years.

Previous blog posts in this series predicted: that tech firms will soon need government certificates if producing news content, the cyber security risks associated with smart energy meters, the risks associated with sharing data, how social media will fall under increasing government regulation, how the public will build a better understanding of privacy settings on websites, and banks will increasingly become the suppliers of banking services to the big websites.

This entry predicts that young people might increasingly disconnect from the connected world.

Fintech IT professional says: “As more tech scandals come to light around hacking, data abuse, cybercrime, government monitoring, personality profiling and the use of tech platforms to spread misinformation, a more cautious approach to the adoption of connected tech will emerge in younger people. The next generation of users may not see the novelty and excitement that has unfolded in recent years, but view the connected world as much as a hazard as a benefit. Future users may avoid non-essential online tech and consider more carefully the risks and benefits of the services they decide to use. A ‘disconnected ideology’ may emerge in which growing numbers of people aim to minimise their online presence.”

Read part 1 here.

Read part 2 here.

Read part 3 here.

Read part 4 here.

Read part 5 here.

Read part 6 here.


May 3, 2018  8:06 AM

TSB IT team could get slaughtered in May

KarlFl40 Profile: KarlFl40

TSB’s board has appointed law firm Slaughter and May to investigate what went wrong in its disastrous core banking system migration, as the CEO points to middleware problems as the cause of the chaos for many customers.

The investigation report could make good reading with question marks over testing, IT governance and middleware already emerging.

Law firm Slaughter and May will investigate what went wrong when TSB migrated from the Lloyds Bank systems that hosted its customers’ accounts to its new in-house core banking platform.

Customers were unable to access accounts, some saw money disappear while money appeared in other customer accounts that did not belong to them. Customers are still reporting problems nearly two weeks after the migration began on April 21. Some have been on hold for hours while the contact centre deals with unprecedented numbers of customer calls.

TSB senior management including CEO Paul Pester, appeared before MPs at a Treasury select committee hearing. Watch a recording here.

Pester, who has given up a £1.6m bonus due to the migration problems, said at the hearing that the problems were related to the bank’s middleware. He said the engine (the core banking system), that runs the bank is working perfectly. He said since the migration the banks accounts are balanced “to the penny.” But the software that connects this with customers at the front end is experiencing problems.

But one banking IT professional told me: “That doesn’t explain all the different types of problems that have been happening. Looks like capacity, bandwidth, data conversion and probably a whole raft of bugs in the code… like how did people see the wrong accounts and why were balances wrong by millions of pounds. I don’t believe the core system is working as well as they think.”

TSB chairman Richard Meddings said IT governance will also come under Slaughter and May’s microscope. The right level of IT governance is critical. Moving accounts from legacy systems, unpicking all the interdependencies, and putting them in a news system gives me a headache just thinking about it.

Consider the amount of checking, double checking, and triple checking that goes on. In an age of software development which is more akin to building Lego blocks enforcing strict IT governance is tough.

Reports have emerged that TSBs testing was not up to scratch. A report on Software Testing News, citing two contractors working on TSB’s computer systems said that “rushed and inadequate testing and poor internal communication” is the reason for the problems.

In the Treasury committee one MP said sources within TSB had said that when testing software they could only have a result that was a ‘pass’ or ‘brilliant pass’, which TSB denied.

One source said: “That will end badly if it is true.”

Read more about the TSB IT migration disaster

 


May 2, 2018  9:40 AM

TSB IT crisis: Is IT governance strong enough in banking should be the question MPs ask

KarlFl40 Profile: KarlFl40

MPs will probably focus on customer compensation and how TSB will make things right when the Treasury select committee grills TSB and Sabadell leaders about the current IT disaster at the bank, but perhaps IT governance should be one of the main issues to address.

MPs are the peoples’ representatives in government so they should indeed ask TSB what it will do to make things right.

I have listened to many IT related select committee meetings and it is always clear that most MPs have little understanding of IT. Why should they?

But I think there should be some questions about IT governance in there. Banking IT projects of the scale of the TSB migration are incredibly complex. Moving accounts from legacy systems, unpicking all the interdependencies, and putting them in a news system gives me a headache just thinking about it.

Consider the amount of checking, double checking, and triple checking that goes on. In an age of software development which is more akin to building Lego blocks enforcing strict IT governance is tough. But certainly necessary. Problems keep happening in the industry so more questions need to be asked about how IT projects are managed.

We will probably find out in a year or so after an inquiry what went wrong and it will be interesting to see if better IT governance could have prevented it.

Today at 14.30 the treasury select committee will quiz three people over the IT crash.

Paul Pester, CEO at TSB, the bank’s chairman Richard Meddings, as well as Miquel Montes, chief operating officer at TSB parent, Sabadell, will face the music.

You can watch it live here.

Read more about the TSB IT migration disaster


May 1, 2018  12:15 PM

Warning to all banks: TSB needs help from IBM because banking industry has cut thousands of IT jobs

KarlFl40 Profile: KarlFl40

When TSB called in IBM to help it solve the IT puzzle its core banking system switch caused I was surprised.

My initial surprise came because TSB is moving to an in-house developed core banking system from its parent company Sabadell. I thought the resources of Sabadell combined with some help from Lloyds bank, whose systems TSB’s accounts were running on, would be enough to fix it.

But no, it needs experts from IBM.

Then it hit me. Of course banks have been systematically reducing their IT workforces to cut costs  for years and increasingly using fintech companies to try and fill the gap.

Banks have been slashing jobs in the thousands. For example figures from the European Banking Federation (EBF), which include the UK, revealed and more than 50,000 people working at those banks lost their jobs. Many of these work in IT.

And at the same time they have not been recruiting new IT staff and therefore missing out on a new generation of IT experts with the skills needed to support them in the digital age. According to analysis from recruitment search site Joblift the amount of jobs advertised in traditional UK banking was just over 100,000 over the last 12 months, which was 3% less than the year earlier. But more significantly is that IT jobs only made up 4.7% of these and didn’t even make it into the top five  where accountants were most in demand (23%). In comparison, 25% of jobs advertised at fintechs were for software developers.

Furthermore fintech companies are becoming more attractive to work for. Joblift revealed that the average fintech employee earns £10,000 more on average than workers in the traditional banking sector. We used to say that banks get the best IT talent but that is certainly doesn’t seem to be the case these days.

Read this interview with the man currently in charge of TSB’s IT

Read more about the TSB IT migration disaster

TSB customers have experienced a weekend of problems with online banking services as the bank migrates from Lloyds Bank systems to its new core banking system.

The Information Commissioner’s Office and the Financial Conduct Authority are assessing the IT meltdown at TSB that led to some customer accounts being seen by other customers

TSB’s very public IT problems will send shivers down the spine of IT teams at large banks that are yet to migrate to new core banking systems

TSB chaos: When choosing a bank, people should look at core banking platform and not just funky apps.

TSB customers are still experiencing problems using online and mobile banking services after almost a week of disruption.

TSB’s IT problems have moved into a second week as the bank fights to get its services and reputation back on track.


Page 1 of 812345...Last »

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to: