Tag: fintech

Data-Driven Decision Making: How Advanced Analytics Is Shaping Fintech Strategies

Data-Driven Decision Making: How Advanced Analytics Is Shaping Fintech Strategies

November 21, 2023

Data-driven decision-making and better fintech strategies are a result of advanced analytics in fintech, a trend which is making the whole sector sit up and take notice of their immense potential. Open banking and big data analytics are shaping the financial sector as it prepares for a more customer-centric and digital shift in the near future.  How has Data Analytics in Finance Been a Game-Changer for the Industry? Advanced analytics in fintech has completely changed the operational rules of the game for these platforms along with other financial institutions at large. Customers now have more control over their finances with open banking and expect more personalised experiences as a result. Big data analytics in finance is forecasted to continue its growth momentum, leading to newer fintech innovation opportunities. More platforms and market players will look at leveraging big data to deliver better services to customers along with tailored and personalised products and experiences.  Here’s how advanced analytics in fintech can help industry stakeholders in the current scenario:  As can be seen, advanced analytics in fintech has several potential benefits that will usher in a whole new era of smart banking and finance solutions in the future. Companies can easily optimise customer acquisition with data-driven marketing and personalisation. They can also scale up customer retention as a result, while identifying better opportunities for up-selling or cross-selling along with communicating better with customers in a personalised manner. They can also combat cyber-security issues and fraud better through machine learning algorithms that identify unusual patterns, anomalies, and other suspicious activities. AI and automation can be used to swiftly gather insights from vast amounts of information while also enabling automated customer service and communication via Chatbots.  Sounds interesting? Analytics and AI are poised to bring in a whole new world for customers and fintech players alike. The best part is that there are only upsides for all stakeholders in the process.  FAQs How is advanced analytics revolutionising data-driven decision-making in the fintech industry? Advanced analytics is helping fintech players make data-driven decisions related to personalised customer communication, marketing, offering tailored products and services, meeting customer demand, and also in terms of evaluating market conditions and responding to them more accurately.  What types of data sources and analytics tools are fintech companies leveraging to gain a competitive edge? Fintech companies are leveraging various data sources including their own databases, online channels and social media platforms, POS transactions and other transaction histories, and more. They are also leveraging AI and machine learning along with automation and big data analytics to gain a competitive edge in their respective market segments.  How can data-driven insights lead to more personalised fintech products and services for customers? Data–driven insights help fintech companies build personalised customer profiles and offer customised products and services to customers based on their transaction history, behavioural habits, preferences, and other parameters.  What are the key challenges and considerations when implementing advanced analytics in fintech strategy development? Some of the major considerations or challenges while implementing advanced analytics in fintech strategy development include regulatory norms, customer consent and data privacy, and the safety of customer data.

Read More »
How A Loan Origination System Can Help Streamline Your Lending Process

How A Loan Origination System Can Help Streamline Your Lending Process

January 17, 2023

Why are loan origination systems gaining ground globally? Many lenders and financial institutions are of the opinion that loan origination system software tools backed by automation and other technologies are the best ways to enhance and streamline the overall lending process.  With a rapid leap towards digitization, conventional banking systems are finding it tougher to consolidate and grow their market presence.   With more consumers adopting fintech and other digital platforms for loans and other transactions, financial institutions are finding it favourable to invest in loan origination systems for future progress.  Digital open source loan origination systems can take care of the whole process of lending, right from the initial process of origination to the final disbursement. Institutions can tap such systems for enabling smoother onboarding of customers upon receiving their loan requests.  This system will take care of several aspects of the whole lifecycle, including application, credit checks, pricing of loans, digital KYC systems, and the final disbursal.  How A Loan Origination System Can Help  The basic loan origination system workflow helps immensely with regard to ensuring agile and smoother loan processes, while covering various kinds of loans, including retail, SBA, SME, commercial, and other types.  With the origination process well established, some of the biggest advantages include lower turnaround times for processing, greater data accuracy, real-time generation of reports, higher satisfaction of customers, greater monitoring and tracking mechanisms, and improved compliance and quality alongside.  Key Aspects Of Loan Origination  An online loan origination system will take several aspects into account, including the following:  Loan applications– This includes getting applicant details while helping people with their application formalities.  Processing– This covers the verification and collection of the information or details of applicants.  Underwriting procedure– This is a procedure which helps lenders work out if the loan applicant is a high or low risk customer and whether the loan request should be approved or not.  Disbursal– This is the last step where the formalities are taken care of and other details are scrutinized, while the loan amount is eventually disbursed.  Customer servicing– This covers all servicing-related steps, including dispatching reminders and also ensuring timely loan repayment.  What A Loan Origination System Should Possess There are several loan origination system requirements that should be kept in mind. These include the following:  Automated Lending Procedures  The origination system can help in automating end-to-end processes of lending, while centrally organizing workflows that cover everything from managing leads to the final disbursal and customer servicing.  A Unified And Single Customer Interface  The system should fuse various functions which are a part of the loan process under a single platform. This will lower manual and operational issues, while ensuring that customers get a more standardized and high-quality experience at the same time.  Digitized And Easier Loan Process The system should garner all necessary details digitally, while helping with easier archiving, tracking, retrieval, control, and traceability. The origination system will also lower manual errors and overall cycle timelines. Integration With Core Banking Mechanisms  The origination system should easily integrate with the legacy and core banking systems of financial institutions, while automating various aspects including validating credit scores, managing leads, and checking blacklists.  Configuring And Automating Credit Policies Deviation and credit policies usually begin with specific guidelines and are standardized through similar scenarios occurring repeatedly, which leads to higher wastage of time for workers in various sectors. The right automation system can take care of business cases which are repetitive and also enable empowerment of personnel to emphasize more on transactions with higher values.  Better Compliance Tracking And Management The loan origination system should enable a financial institution to manage compliance better, while arranging procedures seamlessly for easier traceability and visibility.  Better Deployment Systems The loan origination system should be flexible enough for ensuring that tailored solutions work in contextual scenarios, instead of being imposed and standardized solutions. This will lower the time of implementation while enabling swifter time-to-market for institutions as well.  A good loan origination system can enable quicker loan processing and better customer experiences in sync with digitization of the entire banking and financial services sector. This is why loan origination systems are becoming the preferred mechanism for several financial institutions. 

Read More »
Embedded Finance

All You Need To Know About Embedded Finance

December 30, 2022

Embedded finance is one of the biggest trends today, indicating a seamless integration of the non-financial and financial services spectrum. It will help in streamlining financial systems and procedures for consumers while enabling superior user experiences simultaneously.  For example, embedded finance may help customers make their purchases and receive credit at one point rather than visiting a banking branch for applying for the credit in question and then make the purchase.  Customer-facing platforms digitally tap into these technologies for integrating financial solutions into their own spectrum of services. What is embedded finance?  Consider a scenario where an e-commerce platform integrates a checkout option for financing purchases or any e-wallet helps people to directly exchange money.  It can even be any other product platform offering insurance services for buyers. There are basically limitless possibilities ahead for embedded finance technology.  What about regulatory aspects?  These are no stumbling block at least for now. The entity which is regulated, i.e. the fintech player or banking institution, will be taking care of these aspects, including licenses, compliance, safety of consumer operations, deposits, and so on.  When financial services are embedded into various transactional platforms, it translates into a win-win for consumers. Embedding adheres to regular operational protocols for working with the help of APIs.  Upon a clear blueprint from product managers, developers solely have to deliver code as per the vision of the UX designer.  This trend will certainly become one of the biggest across the global economy and financial services sector over the next years, particularly for its potential to maximize revenues from every individual customer.  Delving Deeper Into Embedded Finance Here are some operational mechanisms for embedded finance that are worth noting:  Embedded Payments These enable consumers to make their payments with a one-touch mechanism, and also minus any need to shift between apps, enabling faster settlement and checkouts.  Embedded Cards These can temporarily replace debit/credit cards for regular transactions between vendors and users. It enables fund transfers to these cards digitally for purchases, restricted to the value of the funds transferred and this can be activated. These are more secure for consumers and include expense cards, smart cards, corporate cards, and other digital/virtual cards.  Embedded Credit Several platforms can allow consumers to get credit instantly while buying any item, thereby doing away with the need for huge paperwork, applications, separate procedures, and so on.  Embedded Investment Options Platforms may offer a one-stop solution for investing in various avenues and managing the same easily. Multiple financial instruments may be accessed without leaving the one-stop platform in question.  Embedded Insurance Solutions Embedded insurance solutions refer to better integration across platforms, enabling companies to approach and get insurance customers through multifarious trusted platforms.  Embedded Banking Services This refers to the integration of financial solutions with any other brand app or platform via APIs. This may include contactless payment, bank transfers, lending, and more.  Naturally, embedded finance has its fair share of advantages including enhancing the average order value, customer count, lifetime value of a customer, and customer retention figures for digital and other brand platforms, while helping them earn some alternative income via revenue-sharing as well.  These platforms will also get a chance to gather invaluable customer information for insights on buying patterns. Financial institutions benefit from tapping the distribution abilities of these platforms/apps, while gaining access to vital data on borrowers, useful for enabling customized financial offerings for them.  They also benefit from a higher pool of customers while improving lifecycle management of credit and underwriting in turn. This will ultimately enhance their revenues/profit margins as well.  Consumers benefit from more convenience, easier access to almost all major financial solutions, and customized financial offerings, along with better user experience across multiple trusted platforms. Embedded finance thus translates into a viable and beneficial solution for all stakeholders in the process, i.e. the financial institution, the platform, and the end-consumer. It could well become one of the defining trends of not just 2023, but for the coming decade too!  

Read More »
Understand the Big 5 Personality Factors to Manage IT Workforce Better

Green Fintech: When Financial Technology Hugs Trees

March 23, 2022

The Paris convention guidelines to prevent the 1.5-degree Celsius rise in global temperatures requires an all-out effort by every human, machine, and technology. Naturally, the FinTech sector too is covered and needs to do its bit to protect the one home we have – Earth.  A sustainable FinTech company is thus, no longer a fad. In fact, green fintech is a hot topic among software developers, entrepreneurs, investors, and end-users, and it’s a powerful trend to leverage for the growth of a new financial revolution. What Is Green Fintech?  FinTech takes on a green shade when financial services and products are deployed considering the environmental factors in the financial operations, to promote and stimulate sustainable investments and limit the sector’s carbon footprint.  Per the Green Finance Action Plan in 2019, it is now the fledgling agenda of sustainability. One of the primary initiatives is to use FinTech expertise to address the key difficulties in the Green Finance market. What Happened In Singapore Needs To Spread Out To The World The Monetary Authority of Singapore (MAS) has actively promoted FinTech and Green Finance and their adventure began in 2015. It is now widely regarded as one of the world’s top FinTech centers. Singapore comprises 101 FinTech companies and each one of them is looking forward to transforming to Green FinTech by factoring in sustainability goals and reducing their carbon footprints.  What Are The Goals and Objectives? The summit set a number of goals, consisting of raising funds to guarantee US$100 billion in “climate finance” to impoverished countries each year. The next goal is collaborating to accelerate climate change action through governments, corporations, and civil society. Several Green FinTech operations, such as green bonds, green investment funds, and huge organisations purchasing climate risk insurance, have been shown to be critical in mitigating climate change risks. Vibrant Ecosystem Establish a thriving Green FinTech ecosystem in Singapore and then expand the initiative beyond the country’s borders. Drive Partnerships Creating bridges between financial institutions, investors, green technology and solution suppliers, Environmental, Social and Corporate Governance (ESG) service providers, and businesses. Trusted Data Flows Establishing a digital framework to support the flow of consistent, clear, and trustworthy ESG data, as well as access to other global and sectoral data platforms. Why is it important? Green FinTech is a more environment friendly alternative to traditional finance. Gone are those days, when you used to drive to your bank to get a printed bank statement. Now, you can access your bank statements within a few clicks digitally. It improves convenience, reduces carbon footprint, and provides greater transparency in personal money management.  AI and Data – The Green FinTech Catalysts The most promising FinTech ideas for a sustainable financial sector encompass Artificial Intelligence (AI), sophisticated data analytics, tokens, and Distributed Ledger Technologies (DLT). These aid in detailing real-time public opinions in relation to sustainability via AI analysis of large amounts of unstructured data.   AI helps in determining if the company’s behavior has a good or negative influence on each of the Sustainable Development Goals (SDGs). The robo-advisors assist small investors to direct long-term investments and monitor SDG compliance. Furthermore, the utilisation of big data to assess the environmental effect of a company’s assets is done too.  Potential Challenges And The Blooming Solutions The primary challenge in Green FinTech is prioritising profit over the planet. The solution to it is the integration of ESG and coping with the demands of greener products by Millennials and generations that come after it.   The shift to green investments leads to the rise of reassessment challenges of valuing multiple traditional assets. The inclusion of alternative data sourcing through contemporary analytical platforms and tools supported by AI players can be beneficial. Also, current ‘greenwashing’ practices initiate funds and are engineered and amended to make them look more beneficial than they are actually. This generates legitimacy skepticism through green finance and demands diligence from investors in making financial decisions. Here, standardisation of screening and proceeding projects to attain compatibility as per low carbon economy is a viable solution. What’s the future for Green FinTech? Green Fintech plays a major role in the journey to a low-carbon future. With so many inventive new products, funds, and investment possibilities developing all the time, the start of a decade of massive change throughout society and the environment will undertake, and the current blend of innovation with sustainable objectives means there’s a lot of optimism around to get the job done. 

Read More »
Flexi Hiring in Indian IT Industry to Increase Exponentially

E-money, Digital Age And Safety

March 8, 2022

Did you know over 50 million people worldwide are unbanked? This paves the way for electronic money or e-money, as a smartphone is the only requirement. E-money is the electronic monetary value store operable through technical devices to make payments. But doubts regarding its safety are in the air.  Why E-money? Per this research, banks worldwide are integrating e-money to offer an efficient currency transaction facility to their customers. It aids the execution of global money transactions at the speed of thought. It also improves recordkeeping without any physical burden.  Why Make E-money Safer And How? Electronic money allows cashless transactions and is considered transparent and safe in general, drawing millions of users who depend on e-money to make up for their lack of formal bank accounts.  But loopholes are emerging as it continues to evolve and become integral to our daily lives. To prevent the electronic payments industry from becoming unsafe and unreliable,  stricter enforcement is essential. E-money functions on a regulated framework, unlike other private digital money gateways. This fails to guarantee the desired protection and security paradigms required by today’s consumers.  A robust and comprehensive framework having restrictive rules is the best possible remedy. Establishing operational systems for risk management and governance on the framework would protect consumer data, handle disclosure fees, and deal with customer complaints.  To protect customers’ funds, safeguarding and segregating approaches are mandatory for all issuers to implement. Maintaining a secure liquid fund pool equivalent to customers’ balances is a critical safeguard. This would ensure monetary recovery in the event of bankruptcy and fund misuse. However, the lack of clear bankruptcy regulations for e-money issuers might cause money segregation to backfire. Customers would also be deprived of quick access if issuers fail to solve the problems as the fund stays apart. The combined solution is continuity assurance of critical payment services through a recommended set of rules and policies. There is a continuous push to expand the e-money presence globally. FCA data presented companies to process more than £500bn of transactions for 12 months till June 2021. Depending on the size and business model of the e-money system, supervisors and regulators must set up user safeguards and increase prudential control.  The countries having systemic issuers need to maintain payment service continuity and preserve customers’ funds, simultaneously. This requires extra efforts to assure protection and make it work effectively. Customer accessibility issues can be resolved by using services that are easily changeable and repairable. 

Read More »

How Disruptive FinTechs are Solving MSME Credit Crunch? –An Indian Perspective

August 23, 2019

Snapshot of the current Indian MSME sector  8 million enterprises Employs approx. 124 million people 14 % are women-led enterprises 59.48% of total establishments were found in rural areas Accounts for 31% of India’s GDP Accounts for 45% of exports Biggest Challenge: Lack of adequate and timely access to finance Source: MSME Annual Report Source: MSME Annual report Traditional Financial institutions remain wary from providing loans because Small ticket size Higher cost of servicing the sector Limited ability of MSMEs to provide collateral The overall demand for both debt and equity finance by MSMEs is estimated to be INR 87.7 trillion (USD 1.4 trillion), which comprises INR 69.3 trillion (USD 1.1 trillion) of debt demand and INR 18.4 trillion (USD 283 billion) of equity demand. This need for technology disruption in formal debt financing has been underscored by a credit gap – estimated at USD230 billion in 2017 – coupled with demand and supply-side issues in financing for MSMEs. Source: Estimation-of-Debt-Requireme-nt-of-MSMEs-in_India report The Role of Technology in Driving Digital Finance According to PWC, MSME banking is likely to be the fourth-largest sector to be “disrupted” by Fintech in the next five years after consumer banking, payments, and investment/ wealth management. Fintech companies are offering solutions that can substantially improve efficiencies at every step of the lending process. Fintech models can provide end-to-end solutions for the lending value chain or “full stack lending models” such as peer-to-peer (P2P) lending, marketplace lending, crowdfunding, invoice based financing and so forth. Currently, a number of Fintech companies are providing for small-ticket loans focused on MSMEs that have limited credit history and need formal funding. Vistaar Finance – a Bangalore based company has created online sector-specific credit rating templates for the MSM businesses it serves. With a loan portfolio of INR 1,270 Crores, it has digital branch option for those businesses who wish to transact online and have access to technology to do so. Vistaar Finance has developed a template to list all categories of products as well as the margins a store makes on each product even with such basic information. Its credit managers evaluate customers based on this information. Vistaar has also tied up with Indian e-commerce platform in the B2B segment, mjunction in order to serve its small purchasers on the e-auction platform. The partnership is designed to augment the services of mjunction to its customers and also provide a healthy mix of portfolio for Vistaar in the MSME segment. Another Pune-based Kudos Finance that provides microfinance services to small businesses carried applicant sourcing, credit assessment and disbursal offline since customers do not have access to smart phones and need in-person communication channels with lenders, the company uses stores its credit data and documents, making communication within the NBFC more efficient, ensuring disbursal within 5-7 days. Before approving loans Kudos perform proprietary method of assessment by following robust underwriting process and also performs last mile customer verification to avoid frauds. Kudos has been continuously working on adopting technology to automate processes and has implemented systems to improve customer on boarding experience, decision making quality and reduce turn-around time of a transaction. Kudos Finance & Investments is actively using 28 technologies for its website. These include Viewport Meta, IPhone / Mobile Compatible, and SPF. NeoGrowth is a good example of a pioneer lender leveraging deep data insight and analytics to drive customer sourcing, underwriting, and monitoring, supported through a best-in-class tech stack. NeoGrowth serves MSME retailers, applying smart analytics on their bank account and financial data, along with insights from the retailer point-of-sale (credit card) system to predict customer patterns and behavior. The company also offers flexible and innovative repayment options to customers which are linked to their actual business revenues and performance. NeoGrowth assesses a borrower basis the digital spends happening on POS machines at his outlet. The proprietary technology platform of NeoGrowth, helps in analytical underwriting around the digital spends data and other alternate data. With its tech enabled underwriting it provides tailor made loans to various merchants as per their industry segments ranging from food& beverage, apparel, Salon, petrol pumps, automobile dealers etc. NeoGrowth’s card statement based scoring algorithms provide a better assessment of credit – worthiness of small businesses as compared to traditional balance sheet based lending. How are incumbents using Fintech solutions for digital lending? The advent of digital lending has addressed some of the major customer on-boarding hurdles faced by loan seekers in India. Kotak Mahindra Bank which launched its flagship Fintech product Kotak 811 to offer instant credit card issuance states that there was an 85% customer opt-in for the free credit score assessment. In addition to retail credit offerings to individuals, lending startups can play a vital role in formalising credit delivery to MSME, where 40% of the borrowing is still being carried out through informal channels and cash transactions. Bengaluru-based Shubh Loans has started the process to apply for an NBFC licence. The platform, founded by former banker Monish Anand and Goldman Sachs executive Rahul Sekar, is targeting the financially underserved segment. Shubh Loans has reached a monthly disbursal rate of INR 15 crore and is doing around 5,000 loans per month. Another tech startup Moneytap had begun by offering a credit line to consumers in partnership with private sector lender RBL Bank. The Moneytap app was launched in 2015 with RBL Bank, that lets lenders procure a sum between INR 3,000 to INR 5 lakh at a lower interest rate than incumbents. Once the amount has been payed-off, the app let its lender apply for more sum. Way Forward The future of Financial Services industry is bound to be customer-centric, technologically up-to-date( driven by the world of digital) and supportive of internal and external innovation efforts. According to PWC, more than 90 percent of MSME digital borrowers in the next five years will be first-timers. Consequently, there will be more drop-offs as MSMEs become frustrated or confused by the journey and abandon their efforts. Roughly 30 percent of MSME borrowers expressed increased

Read More »

Applications of Blockchain Technology in FinTech

August 30, 2017

Blockchain A blockchain is a distributed database which is used to maintain a continuously growing list of records, called blocks. Each block consists of two sections; one is timestamp which contain the update time information and another contains a link to the previous block. A blockchain is a managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once a block is recorded the data in the given block cannot be altered without the altering all subsequent blocks and collusion of network. On functional point of view, a blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and effectively and in a verifiable and permanent way. The distributed ledger itself can also be programmed to trigger transactions automatically.” History The first blockchain was conceptualized by Satoshi Nakamoto in 2008 & implemented as a component of the digital currency which is known as bitcoin. For bitcoin the blockchain act as a public ledger for all the transactions. Through the use of peer-to-peer network and a distributed timestamp server a blockchain database is managed autonomously. Bitcoin is a use case of blockchain. Blockchain made the bitcoin the first digital currency which solves the problem of double spending without requiring a trusted administrator. Strengths Distributed resilience and control Decentralized network Open source Security and modern cryptography Asset provenance Native asset creation Dynamic and fluid value exchange Opportunities Reduced transaction costs Business process acceleration and efficiency Reduced fraud Reduced systemic risk Monetary democratization New business-model enablement Application retionalization and redundancy Weaknesses Lack of ledger interoperability Customer unfamiliarity and poor user experience Lack of intraledger and interledger governance Lack of hardened/tested technology Limitations of smart contract code programming model Wallet and key management Poor tooling and poor developer user experience Skills scarcity and cost Immature scalability Lack of trust in new technology suppliers Threats Legal jurisdictional barriers Politics and hostile nation-state actors Technology failures Institutional adoption barriers Divergent blockchains Ledger conflicts/competition Poor governance FinTech FinTech is a short term for financial technology is an industry composed of companies that uses new technology and innovation. FinTech companies belong to the banking and financial service sector and they compete with traditional financial institutions and intermediaries in the delivery of financial services. A fintech company can be both startup and established financial and technology companies trying to replace or enhance the usage of financial services of incumbent companies. Today the fintech industry is growing at a rate of 23% year on year. Why FinTech The year 2007-08 during Global Financial Crisis when all the financial companies were melting down. At this time the FinTech companies started to grow from a corner of the financial world. The reason for the raise of the fintech companies are as follows: Anger with the existing banking system: User throughout the world got angry on exiting banking system for limited customer support and transparency. Widespread lack of trust with bank and financial institute post crisis. After the global crisis, banks and financial institute stopped lending to businesses and individuals. Lack of technological advancement. Blockchain in FinTech The raise of fintech companies take place when the banking and financial companies stop the innovation in financial sector. The biggest challenge a fintech company is trust. How to make people trust them, and how to make a safe and secure financial product. Banks and financial companies have huge cash reserve using which they create best in class secure network on which banking transactions take place. Fintech companies lacks fund which restrict them in developing or procuring high security system. Here comes the blockchain technology. Blockchain is cheap in terms of developing and also highly secure. With blockchain a fintech company will be able to manage their financial product very easily and securely. With blockchain technology fintech companies are now able to create various financial products with very less amount of budget to serve their customer. As blockchain is a series of block the company can track the complete life cycle of a financial transaction. Blockchain has given the opportunity to create secure and safe financial product and providing fintech the opportunity to bring innovation in the financial sector. Before we look into the Blockchain applications in the financial industry, let us the see the Blockchain’s benefits: Overstock Overstock is one of the largest US online retailers, decided to focus on building the crypto-capitalism future. In the year 2016 Overstock launched their blockchain based trading platform for public and private. This platform will allow instant and secure share trading online. Openbazar Openbazar is a startup which introduce fee-free online marketplace similar to eBay which is been powered by Blockchain. The platform promotes an active exchange of goods and services between two parties without relying on a risky centralized authority. It enables more and more people to start their e-commerce business without paying for any additional e-commerce tools. Sentbe Sentbe is a fintech company. They provide P2P micro-payments. While many companies provide similar kind of service, Sentbe’s service completely depends on the blockchain. Sentbe offers 60% less expensive service for sending money aboard and offers cash pickup. Abra Abra is also a P2P micro-payment service provider whose main target market is US. Abra provide free P2P money transfers and receiving pay-outs in bank or in cash.   There are many more blockchain use cases given below: Digital Content/Documents, Storage & Delivery Startups: BitProof, Blockcai, Ascribe, Artplus, Chainy.Link, Stampery, Blocktech (Alexandria), Bisantyum, Blockparti, The Rudimental, BlockCDN Authentication & Authorization Startups: The Real McCoy, Degree of Trust, Everpass, BlockVerify Digital Identify Startups: Sho Card, Uniquid, Onename, Trustatom Marketplace Startup: MyPower Smart Contracts Startups: Otonomius, Mirror, Symbiont, New system Technologies Real Estate Startup: Factom Diamond Startup: Everledger Gold & Silver Startups: BitShares, Real Asset Co., DigitalTangible (Serica), Bit Reserve Review/Endorsement Startups: TRST.im, Asimov (recruitment services), The World Table Internet of Things Startup: Filament (industry IOT), Chimerainc.in, ePlug Network Strucutre and APIs Startups: Ethereum, Eris, Codius, NXT, Namecoi, Coloredcoins, Helloblock, Counterparty, Mastercoin, Coron, BlockCypher, Chain.com, Chromaway Currency Exchange & Remittance Startups:

Read More »

Are Millennials hooked onto Robo-Advisors?

June 13, 2017

  Risk and youth go hand in hand. If you are thinking we are talking about thrill-seeking and adventurous youngsters, then here’s the clarification. We are talking about youth and their ability to take the risk in investment. Yes, you read that right. It’s this risk taking and digitally active generation, which is gradually re-shaping the FinTech sector.  As indicated by Wealthfront, millennials will control $7 trillion in liquid assets by 2019. That is surely quite an achievement. The financial institutions are adopting technological innovations such as machine learning, big data and artificial intelligence (AI) to engage and retain digitally-savvy young investors. The robo-advisors, the latest FinTech innovations, are finding followers in millennials. Studies and research suggest that young investors are willing to rely on robo-advisors more than human financial advisors. The use of robo-advisors, thanks to the advancement in AI in FinTech is set to explore more in the coming days. These algorithm-based advisors cater to the needs of digitally motivated customers, thus helping companies and also investors make cheaper, faster and better decisions. Did you know Wealthfront, one of the leading robo-advisors, has resulted in the growth of AUM from $100 million to over $3.7 billion by September 2016, placing it in the top 100 independent registered investment advisors in the United States? The advent of robo-advisors has definitely given a much-needed boost to the existing business models in the FinTech world especially when it comes to portfolio management, asset management, wealth management and financial planning. So, let’s take a quick look at how robo-advisors can help the millennials and also the retirees. Robo-advisors and millennials Let’s admit it. Young guns have changed the way we bank and invest. They don’t prefer to visit the bank physically. Face-to-face business meetings, endless waiting at banks, and filling out numerous yet similar forms are passé. Millennials want everything fast and want to control all their finances and investments at their fingertips via smart devices or computers. This is where robo-advisors are scoring over financial advisors. Millennials prefer handling banking and investing services online. Working with robo-advisors is less time-consuming and require less of paperwork too. These automated investment services offer an easy interface, which is comfortable to use. Millennials like that. Robo-advisors are a great choice for young investors who require portfolio management for a specific savings goal. In that case, the young investor need not worry about other aspects of wealth management such as retirement planning. Also, according to the financial climatic condition, the algorithms reshape the portfolio of the investors. Credit: Sachs Insights According to Meir Statman, professor of behavioural finance at Santa Clara University, automation is important to attract youngsters to invest and adopt good savings habits early on. An individual financial advisor or advisory firm charge 1 % or higher. Here’s the catch. Robo-advisors are economical. For small investors, finding a good financial advisor might come at a cost. And taking help of agents for important financial service and investment decisions are not always a worthy advice. In such initial cases, robo-advisors can come handy and build a portfolio at a lesser cost than a human advisor, who comes at a higher cost. According to Wealthfront, financial advisors charge 1.31% average fee. However, a robo-advisor charges an annual fee of 0.25% and 0.50%. Betterment, one of the pioneer robo-advisers, charges 0.15%-0.35%. According to a report by Business Insider, a robo-adviser SigFig charges $10 every month. Robo-advisers are good for people who are interested in Exchange-Traded Fund (ETFs) and they are a low-cost solution. Robo-advisors make the process of investing faster and easier. Both Betterment and Wealthfront charge management fee of 0.15% per year for ETFs. Millennials are a very profitable section of the market, comprising 25% of the US population and 21% of consumer discretionary purchases. Knowing how to reach them is vital for survival in today’s market, especially if you’re a company or product that is tied to the technology field. Also, let’s not forget how millennials love their freedom, be it in life or money matters. This is where robo-advisors score again. These automated investment platforms encourage the investors to manage the portfolio on their own (read DIY) by asking them about risk tolerance and investment model they want to choose. Accordingly, the computer algorithms will decide a portfolio for you. According to an article in CNBC, Wealthfront also looks after millennials and their early focus was on young “techies” in the Silicon Valley. Take a quick glance at some of the reasons why millennial find robo-advisors interesting: Robo-advisors are economical You can invest a small amount of money No need for face-to-face business meetings and filling out of numerous forms In case of market fluctuation, robo-advisers automatically rebalance portfolios Robo-advisors make the process of investing faster and easier These automated investment platforms have a user-friendly interface, which makes it comfortable for internet savvy millennials  Robo-advisors and baby boomers Can a retiree who has considerable assets to invest and wealth to preserve rely on a computer for investment planning? Well, even a few years ago, most of the answers to this question would have been an absolute ‘no’. But technology has changed a lot in our lives. And it has also changed our mindset. Today, retirees or baby boomers or the silent generation are no longer hesitant towards adopting technological innovations. Agreed, though most retirees prefer having a human advisor who will manage investment portfolio and provide tailor-made financial advice as and when the market moves, with each passing day, baby boomers are also trying out these computer algorithms for their financial planning. Take this: According to an article published in January 2017 in Business Insider, nearly half of Schwab’s Intelligent Portfolio consumers are above the age of 50. Also, approximately two-thirds of Vanguard’s Personal Advisor Service customers are approaching the age of retirement age or have already retired. We are all aware that baby boomers, pre, and post retirees have more wealth than the young investors. This means people above the age

Read More »

Robo-Advisors are Gaining Popularity in FinTech

June 13, 2017

Investing our hard-earned money is always risky. In fact, any sort of investment and asset allocation is complicated.  And with thousands of investment plans and advice openly floating in the market, we often end up spending a huge amount of time thinking where we should invest. We also worry constantly about how we should go about the financial planning depending on the market dynamics. The arrival of robo-advisors disrupted the traditional fintech sector and changed the way investment models worked so far. Though the term, robo-advisor nearly is nine-years-old, these so-called online wealth managers are increasingly becoming popular in the FinTech services and are building the portfolio for the investors according to their personal needs. What are robo-advisors?  In simplest terms, robo-advisors are computer programs who invest money for the clients in the market. Investors will be asked certain questions about their investment plans, time period and risk tolerance. Robo-advisors using machine learning, big data, and algorithms will manage an ETF (exchange-traded fund) portfolio that best suits the need of the investors online with little or no human intervention. Also, when and how the market moves, the robo-advisors will adjust the portfolio of the client. Interestingly, it was during 1998, the year of Great Recession, when Betterment unveiled to the world the financial innovation, called robo-advisor.  And within a few years, these automated investment platforms driven by artificial intelligence, are one of the developing innovations in the FinTech sector. As indicated by consulting firm AT Kearney, assets under management (AUM) by robo-advisors will take a leap by 68% annually to a gigantic 2.2 trillion in the coming five years.   Robo-advisors have evolved into three distinct models with all sharing the same goal. Fully delegated approach: This model involves standalone firms such as Betterment that use algorithms to recommend stocks and manage portfolios. Their advice is based on user profiles including investment goals and risk tolerance. Their target customers are new retail customers who are not habitual investors. Assisted advisor approach or hybrid robo-advisors: These combine computerized recommendations coupled with on-demand advice from a human being. Established companies like Vanguard’s Personal Advisor offer the hybrid approach for existing clientele. Advanced approach: This model uses complex algorithms to create and manage portfolios. Such companies use in-depth approach model to target HNI/ wealthy investors. Interestingly more firms, dealing with finance, insurance, wealth management and investment gradually understand the disruptive potential of this new innovation and are either buying, building or partnering with robo advisory firms. Now, for the online brokers, who were once-upon-a-time stock brokers, before the Internet revolution completely changed the way finance services were handled, robo advising looks more or less of an electronic service for them. Having said that, traditional companies shouldn’t rush and shift to digital technology suddenly. Reason? Well, let’s not forget they have a number of aging investors who prefer to take decisions from a human advisor till now. In short: at times, they prefer the human touch more than digital. Those firms need to educate the elderly clients about digital platforms and their advantages. This will reduce human liability to manage clients on a day-to-day basis and focus on expansion. Also, it’s important to understand that robo-advisors periodically review recommended portfolios. So, if there is any change in funds or new funds are added, robo-advisors provide relevant reasons for you to decide whether or not to make any changes in your portfolio.  It is important to note that most automated platforms are structured around long-term investments with little or no human intervention in recommended products. But what do you do in short-term investments? In short-term investments, market volatility or in cases of personal emergencies, the automated advisory platform at the most sends the clients’ reminders that he/she is deviating from the long-term goals. However, cash flow and behaviour management suggestions are only offered by full-service robo-advisors. Popular robo-advisors for your investment needs It all started with Betterment, the online investment company based in New York City. Today, they have over $7.3 billion in AUM. From automatic rebalancing, handling diversified portfolios, tax-loss harvesting to managing your IRA, the robo-advisors will be at your disposal for all your financial needs. We list a few companies who are offering customized computer-generated advice. Betterment Wealthfront Nutmeg WiseBanyan Schwab Intelligent Portfolios Vanguard Personal Capital Rebalance IRA Motif Investing Acorns FutureAdvisor Fidelity Go SigFig Blooom LearnVest Now, it is interesting to watch that robo-advisors, which started off in the US are now finding major support in different parts of the world. The market of automated investing is growing at an exponential pace and major players from different countries are increasingly becoming a part of this FinTech journey. From Switzerland, UK to Asia-Pacific (APAC) region, the rising popularity of robo-advisors can be felt in the financial space. As indicated by BI Intelligence, the APAC region will represent $2.4 trillion in robo advisor AUM by 2020.Also, clients across all asset classes are interested in robo-advisors, including the opulent class. According to BI Intelligence, 49% of high-net-worth individuals i.e. HNWIs across the world would consider having a robo advisor manage at least some portions of their money. BI also indicated that by 2020, 60% of these HNWIs would invest 20% of their assets in robo-advisors.In most cases, robo-advisors are considered to be the economical way to invest in contrast to traditional wealth management firms. Agreed, there are challenges for both robo-advisors and traditional firms, which rely on human advisors, to acquire customer base and modulate strategy respectively. So, let’s wait and watch how more investors respond to the new arrangement. Reference: Fox Business, CB Insights, USA Today,   Wall Street Journal, invstr, Forbes, Business Insider, Mint, Economic Times 

Read More »

Services

Industries

Company

Resources

Press Kit

MENU
Book a Free Consultation
CONTACT US

Let’s connect!

    Privacy Policy.

    Book a Free Consultation
    Almost there!

    Download the report

      Privacy Policy.