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  • 5 Reasons Why You Should Use AP Automation System

    5 Reasons Why You Should Use AP Automation System

    Accounts payable automation is a powerful tool that you should use if your company is growing. It’s a great way to track costs and improve efficiency within your organization. This article will discuss why you should automate your accounts payable system and how it can help small business owners stay on top of their finances.

    1. Makes Life Simpler

    Accounts payable automation allows you to automate the entire process of paying your bills, from creating and sending invoices and even paying them. This reduces human error and provides more accurate reports in terms of the exact amount of funds you have. In addition, it also allows you to schedule regular payments, so they’re done at a time that works best for you.

    1. Accuracy

    Accuracy can be hard to achieve when managing your accounts payable process manually. This is why you need an automated system that helps you keep track of all the money flowing through your company.

    AP automation systems will help you increase efficiency and productivity while reducing costly errors and delays in the payment process. You can also use them to track how much money you’re spending on invoices, which will help you make informed decisions about where to allocate resources.

    1. Efficiency

    Automating the accounts payable system is the best way to make sure that you are staying on top of the finances of your business. It helps you to be able to track and control all funds that go in and out of your business, which enables you to manage your cash flow more effectively.

    AP automation software helps you receive payments from vendors on time, avoid late fees, and keep track of expenses. This will help you save money on interest charges, reduce paperwork and errors, increase efficiency, and ensure that all payments are accounted for properly.

    You can get a lot done when you’re not tied down due to human intervention, and that’s another thing this accounts payable automation software will help you do! You’ll be able to create different types of invoices on the fly, which means you can adjust things like payment terms and refunds as needed. This means fewer errors and happier customers!

    If you’re worried about how your current system will work with this one, check with the team before implementing it. Most companies offer free consultations and training on their accounts payable automation software, so you know how to use it the right way. 

    1. Streamlined Processes

    Implementing an accounts payable automation system is a great tool to reduce human error, improve efficiency, and increase profitability. It also helps you create a trustworthy relationship with your clients as they can easily track all of their payments.

    The most significant benefit of using AP automation solutions is that it streamlines the payment process. You can automate processes such as receiving payments from customers and sending invoices to them. This way, you can save time by not doing such things manually. 

    AP automation solutions also ensure that all payments are made accurately and on time. You no longer need to worry about missing payments or paying late fees because it will automatically notify you if a payment has yet to be received. 

    1. Recordkeeping

    Accounts payable is one of the most important departments in any business. Every company has to have a way to pay its bills, and without it, it would be chaos. The problem is that when you have a business to run and limited accounts payable staff, various issues will inevitably arise. For example, if you don’t have proper records on who owes what to whom, invoices stay pending, and services stop.

    Another problem with taking care of accounts payable manually is that it can be difficult to keep track of all invoices and statements. This is why it makes sense to automate this process, so you can save time and take human error out of the equation. The best part is every cent will be accounted for.

    Conclusion

    As you might guess, AP automation solutions can be used in any business that deals with orders or purchases that require quick action. You may not have considered this type of accounts payable automation software because you have so much capital invested in your inventory. However, it’s important to remember that if you implement an AP automation program as a way to streamline your business you can easily keep track of the accounts payable process. 

    AP automation solutions can help you increase the profitability of your company. Using this kind of system for various payment issues is much faster and much more accurate since everything is digitalized.

  • Why Are Fintech Companies Struggling In 2022?

    Why Are Fintech Companies Struggling In 2022?

    After a period of immense growth in the Fintech industry, things have settled down. That’s the optimistic way of putting it, at least. For some companies, the reality is that 2022 has brought them crashing back down to Earth.

    This has been true of tech companies in the financial services industry across the board. Even the best online brokerage firms are struggling to keep their heads above the water. If we truly are heading into a recession, many companies could find it incredibly hard to stay afloat.

    But why is this the case? What happened to make 2021 such a great year for Fintech companies and how did that set them up for failure in 2022? Here’s what you need to know.

    The Success Story of 2021

    Economies around the world bounced back after the recession caused by the pandemic. This happened in all industries, but no industry was as perfectly positioned to take advantage of the rebound as the Fintech industry. Financial services are needed by everybody, and people started moving online faster than ever before.

    The fact is that traditional banking had overstayed its welcome long before 2020. However, in matters that are as sensitive as personal finance, people are reluctant to embrace change. Fintech companies offered convenience, but they had not earned the trust of many, especially in the older generations.

    The pandemic changed that, as people of all ages learned to embrace technology in every area of their lives.

    This led to a boom in the Fintech industry. Existing companies saw an influx of new customers. A wealth of new companies got their first big rounds of funding. The outlook was incredible. 2022 turned out to be a massive wet blanket.

    2022: What Happened?

    Towards the end of 2021, inflation started to become a real problem. Costs were rising, leading to concern among consumers. However, higher interest rates were supposed to bring balance back to the economy.

    A number of factors in 2022, many of which were triggered by Russia’s invasion of Ukraine and consequent sanctions, only made inflation worse. Supply chains broke down and delays in all industries became unavoidable. Individuals and businesses struggled to keep up.

    This has led to fears of a massive recession. Some experts believe we are already in a recession. Recessions are particularly bad for industries that have just experienced a boom.

    Why Fintech?

    The problem is that during a boom, companies that would otherwise never have gotten off the ground receive financing. These companies may not provide an important product or service, but enough people choose to use what they are offering when money is flowing. When the money stops flowing, these products and services are the first to go.

    Just about every tech-savvy person in 2022 has a number of Fintech apps on their phone that they never open. It is these kinds of services that seemed unique and useful a year ago but no longer justify their existence.

    But why has this hit Fintech companies so hard? Well, Fintech products and services are useful only when there is cash flow. When you’re making a lot of payments, payment apps are great. When you’re investing money, investment platforms are necessary.

    However, what happens to these services when people are saving money? All of a sudden, they have no use for services which facilitate its movement. With money sitting in savings accounts, these services become redundant.

    This is especially true for companies that don’t offer a vital service. But it also applies to companies offering services that are much needed by the public. During the boom, many new startups began offering some variation of these products and services. The market became somewhat saturated, which was fine in 2021. With cash flow problems in 2022, the money that is moving is not enough to maintain every one of these companies.

    Will Fintech Recover?

    For the Fintech industry, the reality is that it will always be needed. People will start using these companies again when finances improve. Many companies will also find ways of adapting to provide products that are worthwhile in a recession.

    That said, many of the more redundant companies may not get a second chance. Investors will be wary of funding ventures which have no real purpose other than to make some cash.

    It remains to be seen whether we will enter a true recession. If we do, many Fintech companies which are already struggling might find themselves in deep trouble.

  • Why the Cloud Is an Integral Part of Fintech

    The cloud has revolutionized the way that people store information. The cloud is integral to Fintech because it offers a cost-effective and scalable platform for storing data, processing transactions, and running applications. It also helps ensure that your company’s security is safe from cyberattacks.

    Cloud computing enables businesses to focus on their core competencies while leveraging powerful new capabilities for managing information, processing transactions, analyzing data insights, securing sensitive data—all without incurring significant upfront investment or long-term commitments.

    This blog post will explore how the cloud is an integral part of Fintech.

    What is a Fintech application?

    A Fintech app is an app that provides financial services. More specifically, a Fintech application typically includes money transfers or payment processing tools. Therefore, more often than not, these apps are mobile-based and include functions such as account balances and transactions history tracking, bill paying by scanning checks with your smartphone’s camera – without the need to visit the bank branch or pay them online from anywhere -, etc.

    In addition, most fintech applications provide security features like two-factor authentication, making it harder for hackers to access sensitive information stored on your phone. In this way, users can feel safe when using their devices to carry out different tasks requiring high-level privacy protection.

    Why is Fintech Using the Cloud?

    The cloud is an integral part of Fintech because it can help businesses to reduce costs when implementing solutions. It also helps companies looking to expand their resources without having the high up front cost that would normally come along with this type of investment.

    Since you don’t need additional hardware for your cloud computing, you’ll be able to manage and maintain these services in a more efficient manner than if you were operating on-premise (in-house) servers or infrastructure. There’s no hardware required, which means there will be less maintenance involved as well since much of this work can take place remotely, allowing IT support staffs’ time to be better spent elsewhere instead of just sitting around waiting for something to go wrong with equipment at the office facility where everything is being hosted.

    Why is Cloud Technology Important in the Fintech Industry?

    Cloud technology allows for real-time updates and changes, which is important in the Fintech industry, where things can change rapidly. The cloud also allows for scalability, so businesses can grow as needed. And finally, the cloud provides security and compliance assurances essential in the financial sector. For all these reasons, it’s clear that the cloud is a key part of Fintech.

    The impact of cloud computing in Fintech

    The impact of cloud computing in Fintech is immense. It is the new way of doing things without being limited by infrastructure or resources.

    The cloud has enabled companies to quickly access computing power, storage space, and software on demand at a reasonable cost. Fintech companies use this resource extensively to manage their data centers with ease and computing needs required for business growth. Online payments have benefitted from the cloud in many ways, including scalability, security, transaction speed, etc. Cloud computing allows your company to focus on differentiating features instead of worrying about maintaining hardware and software requirements. This means you can use all your time developing innovative products rather than deploying them. The ultimate result? More revenue streams through faster online payment processing services go to the cloud.

    The cloud is playing an important role in developing new payment technologies and services. The cloud is also being used to develop new ways of processing faster, more reliable payments and provide a better customer experience. All this would not be possible without the cloud.

    What Type of Cloud is Best Suited for Fintech and Why?

    Public, private, or hybrid? The cloud is an integral part of Fintech, and the type of cloud you choose will depend on your specific needs. If you’re looking for scalability and flexibility, public clouds are a good option. Private clouds are better suited for companies that need more control over their data security. Hybrid clouds combine the best features of both public and private clouds. Whichever type of cloud you choose, make sure it’s able to handle the high-volume transactions typical of FinTech applications.

    Why are Fintech Organizations Embracing the Cloud?

    The cloud offers fintech organizations a number of advantages, including:

    Flexibility and scalability

    The cloud can easily scale to meet the needs of your organization. This is important for fintech organizations that are constantly growing and expanding their services.

    Cost savings

    Cloud-based solutions often cost less than traditional on-premises solutions. Fintech organizations can save money by taking advantage of the economies of scale offered by the cloud.

    Accessibility

    Cloud-based solutions are accessible from anywhere in the world. This means that your fintech organization can be available 24/365 around the globe, which is important when dealing with global customers and markets.

    Security features

    The security features built into modern cloud platforms protect data against attacks while still allowing users to access it remotely via a mobile device or computer.

    Better interoperability

    Cloud-based solutions are compatible with other systems and protocols, including Web services standards like XML and RESTful API calls. This makes them easier for developers to integrate than on-premises software products.

    What Has to Happen for Cloud Adoption to Increase In Fintech

    Several challenges need to be addressed before the cloud can become more widely adopted in the Fintech industry. These challenges include:

    -Security and privacy concerns

    -Lack of standardization

    -Data latency issues

    -Limited bandwidth and storage capacity

    These challenges need to be addressed if the cloud will play a larger role in Fintech. The good news is that many companies are already working on extended car warranty solutions to these issues, and we should see some significant progress over the next few years. Cloud adoption will continue to increase in Fintech as these issues are resolved.

    Conclusion

    It’s not just the tech giants who are building their services around cloud computing. Fintech companies have embraced this technology to provide better customer service and greater security for sensitive data. As more people turn away from banks in favor of these digital options, they must be able to trust vendors with their personal information. The best way to do so? Make sure you use a secure cloud provider like AWS or Azure

  • Fiserve CEO: From Large To Small There’s a Comeback In Payments

    Fiserve CEO: From Large To Small There’s a Comeback In Payments

    “It’s a great space a great and a great opportunity,” says Fiserv CEO Frank Bisignano. “You have to love the clients and you have to love the payment space. The opportunity to build things and grow is always a lot of fun. From large to small there’s a comeback in payments and we see growth going forward.”

    Fiserv, a major fintech player worldwide, had a strong earnings report in the second quarter with 129 percent growth in revenue.

    Frank Bisignano, CEO of Fiserv, discusses how their Clover acquisition will help the company power their growth going forward. Fiserv announced that they completed their $22 billion purchase First Data which included Clover on July 29:

    From Large To Small There’s a Comeback In Payments

    Clover is an unbelievable platform. It continues to grow. It serves small businesses. We think it’s integral. Our bank partners love it since we announced the deal. We have 160 new banks that want to be Clover partners with us. It is growing. We talked about a 32 percent growth rate in July in the heat of a pandemic. It’s a tool that we help businesses manage their business through. It’s a great asset to help small businesses. We see it as an integrated solution for our company.

    We’ve seen growth with Clover. We talked about seeing what we call internal revenue growth which is driven by transaction volume. We see transaction volume up and there is obviously a large move to e-com. If you look at our Clover platform which has order ahead capabilities and virtual terminal that’s driving that growth. From large to small there’s a comeback in payments and we see growth going forward. There are still businesses coming back in the recovery. Lots of businesses are still working their way back. We’re here to help small businesses grow.

    Fiserve CEO Frank Bisignano: From Large To Small There’s a Comeback In Payments
  • Verizon and Mastercard Team Up to Apply 5G to the Payments Industry

    Verizon and Mastercard Team Up to Apply 5G to the Payments Industry

    Verizon and Mastercard are partnering to bring the benefits of 5G to the payments industry.

    5G stands poised to revolutionize numerous industries, not the least of which is the financial sector. Like most carriers, Verizon has been moving ahead at full-speed in its efforts to deploy its 5G network.

    The two companies plan to use 5G to help “drive transformational solutions for the global payments and commerce ecosystem.” The next-gen wireless technology will help revolutionize new areas of the commerce industry, including contactless payments and autonomous checkout.

    In particular, the two companies’ efforts will help advance the use of smartphones for making and accepting payments, providing touchless retail experiences, VR/AR shopping and creating new ways to consume digital content.

    “Business needs and consumer demands constantly fluctuate. Critical components of long-term success are the ability to remain agile and align with strategic financial and payments partners that have the tools and capabilities to drive industries forward,” said Sampath Sowmyanarayan, CRO, Verizon Business. “Coupling Verizon’s leading global IP network and transformative 5G technology with Mastercard’s deep industry expertise, leading services and solutions, and a strong commitment to innovate, is a partnership that aligns perfectly with what we are striving to achieve at Verizon and one that can create game-changing solutions.”

  • Google Pay Hemorrhaging Talent

    Google Pay Hemorrhaging Talent

    Google Pay is losing talent, in the form of both executives and employees, as the division struggles to gain ground.

    The FinTech market is one of the hottest in the tech industry right now, but Google seems to be struggling with its Google Pay division. According to Business Insider, team members are frustrated with the slow progress of the company’s app development.

    It seems the departure of Caesar Sengupta, a senior executive in charge of payments, was the tipping point for many employees and executives. Since that time, at lease seven director or vice president-level leaders have left the team.

    “There’s been an exodus,” one person told BI. “I think Caesar leaving was the breaking of the dam.”

    Another person said that roughly half of the employees for the Google Pay business-development team have left.

    “Caesar leaving was the capstone on a lot of frustration felt by employees,” this person said. “The product wasn’t growing at the rate we wanted it to.” 

    The news is troubling for Google efforts in the field, and the company will clearly need to do something to right the ship.

  • Square Buying Afterpay Limited

    Square Buying Afterpay Limited

    Square has announced it is purchasing Afterpay Limited, the Australian firm that made its name in the “buy now, pay later” business.

    Square is one of the leading companies in the payment processing market. Afterpay, allows customers to buy a product, and then pay interest-free over four installments.

    The two companies’ clearly see their services as complimenting one another in their shared purpose to revolutionize the financial market.

    “Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” said Jack Dorsey, Co-Founder and CEO of Square. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”

    “Buy now, pay later has been a powerful growth tool for sellers globally,” said Alyssa Henry, Lead of Square’s Seller business. “We are thrilled to not only add this product to our Seller ecosystem, but to do it with a trusted and innovative team.”

    The deal is worth approximately US$29 billion, and is expected to close in the first quarter of 2022.

  • Visa Ends Plaid Takeover Bid Amid DOJ Suit

    Visa Ends Plaid Takeover Bid Amid DOJ Suit

    Visa is abandoning its plans to acquire Plaid after the Department of Justice (DOJ) sued over antitrust concerns.

    Visa announced in January 2020 its plans to purchase Plaid. While the smaller company is primarily known for a service that allows users to connect their bank accounts to various finance apps, the company was working on a service that would directly compete with Visa’s core business.

    As a result, Visa’s move to purchase Plaid, to the tune of $5.3 billion, was widely seen as an attempt to stamp out a competitive threat from a smaller rival. The DOJ was concerned by that, especially given Visa’s dominance in its market, prompting it to file a lawsuit.

    According to CNBC, Visa has ended its takeover attempt, a decision the DOJ has hailed as “a victory for American consumers and small businesses.”

  • We’re Offering Technology-Driven Virtual Banking, Says WeLab CEO

    We’re Offering Technology-Driven Virtual Banking, Says WeLab CEO

    “We got our virtual banking license in April,” says WeLab CEO Simon Loong. “These are very exciting times. We’re busy building a bank, hiring, recruitment, that’s our core focus. What we’re working on right now is rebuilding the core functions of the bank but with a more innovative and more tech-driven approach. Traditional banks have their own way of doing things, but what we’re looking at is how do we look at offering technology-driven banking through innovation and technology?”

    Simon Loong, co-founder and CEO at WeLab, discusses building a virtual bank in Hong Kong and how that will revolutionize banking in favor of the customers in an interview on Bloomberg at the Rise Conference in Hong Kong:

    We’re Offering Technology-Driven Virtual Banking 

    We got our virtual banking license in April. These are very exciting times. We’re busy building a bank, hiring, recruitment, that’s our core focus. We’re looking at how do we launch a bank within this year and we’re still on track for that. What we’re working on right now is rebuilding the core functions of the bank but with a more innovative and more tech-driven approach. Traditional banks have their own way of doing things, but what we’re looking at is how do we look at offering technology-driven banking through innovation and technology?

    We look at three I’s. How do we offer financial services instantly to consumers? The second is intelligence. How do we actually use data to predict what customers need and offer them the right set of products? The third is interactive. How do we interact with our customers? Marketing does not talk to people with a phone anymore, it’s completely through mobile apps.

    Virtual Banking Is An Emerging Trend For Hong Kong

    Competitiveness in the market is a very interesting thing that we’re seeing. Even now, before the launch, in just the last couple of weeks, four of the major banks in Hong Kong started reducing the minimum account balance in anticipation of the virtual banks launching this year. Existing banks have to change the way they work and we’re seeing that right now. Going forward, what we think will happen is initially people will have a second virtual bank account. They will enjoy it, use it, and it will increasingly become their core bank account. 

    For the younger generation who will come on to banking for the very first time in their lives maybe this will be their primary bank account going forward. Our internal projection is that this is going to be the emerging trend for Hong Kong. Virtual banks will offer better choices and more choices for consumers. In the end, consumers will be the beneficiaries of it. We haven’t looked at pricing yet but what we’re looking at is how an innovative customer experience allows us to attract customers. We look at the younger millennial tech-savvy set and what they look at is actually a better customer experience rather than an incremental few basis points on their savings. 

    Virtual Banks Have a Competitive Advantage

    We as bankers have been trying to do (virtual banking) in the past in traditional banks as well. What we always found the difficulty in was the legacy systems, traditional management layers, and layers of (obstacles) that were built over the years. How do we unwind them? Starting afresh definitely has its own benefit. Also, if you look at traditional retail banking, it was built as a branch distribution model. You have branches, telephones, and stuff like that. Then you finally added onto it a layer of core internet and mobile. 

    Legal and compliance are an extremely important part of this and virtual banks are subject to the same regulations as a normal bank. But I think virtual banks do have a competitive advantage. Number one is when you start afresh you don’t have layers and layers of manual processes that you’ve built in the past. You start with the latest and most dynamic kind of regulatory regime in mind. The second thing is that virtual banks will initially offer simpler financial products where you have actually fewer compacts and compliance infrastructure to monitor. traditional banks typically have a wide array of products that you need to monitor. That allows virtual banks to be more specific and more nimble.

    Adding a multi-only-channel approach becomes increasingly more complex for it to break down. If we start afresh where we only have mobile-only or online-only, that simplifies things and allows you to have a much faster time to market. That is very important in this very competitive world. 

    Focused On Building a Fantastic Virtual Bank

    What we are going to look at is how do we build a bank with good economics and also provide customer lifetime value? In the past, we looked at products and their profitability. But what we look at right now is a whole relationship and a customer lifetime value by cohort and how they actually become profitable over the years. Bringing a customer on board today may not be profitable because of acquisition costs. Over time, when they become more and more loyal to us, when we have more products and services, and when they become more engaged with us (they will be profitable). It will be a new way of looking at the whole P&L, managing it on a customer lifetime value on a cohort basis.

    We are massively hiring. I think this is an exciting time for virtual banks right now. We are looking at very specific talents, for example, in areas like products, technology, and compliance. These are areas that we are hiring for. I think for us we learned as a homegrown fintech champion in Hong Kong our benefit is that we already have an existing team in Hong Kong versus the rest of the virtual banks. We have around 80 to 100 people in Hong Kong today. What we need to do is just fill certain skillset gaps that we don’t have. What we’re looking for specifically is bankers with an open mind and intellectual curiosity who wants to do something different and build a bank that they love.

    What we’re focusing on is building the bank now to make it a fantastic virtual bank in Hong Kong launching by the end of this year.

    We’re Offering Technology-Driven Virtual Banking, Says WeLab CEO Simon Loong
  • Google Preparing Debit Card to Compete With the Apple Card

    Google Preparing Debit Card to Compete With the Apple Card

    Following the success of the Apple Card, Google is preparing its own debit card.

    According to TechCrunch, Google is developing both a virtual and physical debit card. Unlike the Apple Card, which is a credit card backed exclusively by Goldman Sachs, Google’s debit card will work with an array of banks.

    TechCrunch’s source said the card will be linked to a Google app, providing an easy way to monitor balances, purchases and more. It could also substantially beef up Google Pay, which is currently restricted to online and peer-to-peer payments. TechCrunch’s source provided photos, as well as proof they came from Google.

    If true, the news is the latest example of a major tech company moving into the financial market. Tech companies are eager to offer financial services, and tie-ins to their core products, in an effort to keep customers firmly rooted in their ecosystems.

    Given Google’s past privacy issues, however, the company may have its work cut out convincing individuals their data and privacy will be respected.

    Image Source: TechCrunch

  • How WEX Has Dramatically Diversified Its Payment Solutions

    How WEX Has Dramatically Diversified Its Payment Solutions

    “Over the last several years in the company’s history we’ve diversified the business so that we have less and less exposure to fuel,” says WEX CEO Melissa Smith. “But as fuel prices go up we do have some benefit from that and when fuel prices go down we do have something negative to that. When we first went public almost 70 percent of our revenues were exposed to fuel prices and now it’s in the 20s.”

    Melissa Smith, CEO of WEX, discusses how the company has diversified its payment solutions into areas such as travel, healthcare, and corporate payments in an interview with Jim Cramer on CNBC: 

    Wex DriverDash App Makes Fleet Fueling Efficient and Secure

    On the field card side of the business, we’ve developed a product called DriverDash, a mobile payment device. People use their mobile phones, they have our app loaded on that, and it uses facial recognition in order to allow someone into the app which turns on the pump. If you’re driving your Ford F-250 and you’re sitting next to the pump, it turns the pump on remotely. So it’s very secure. Then as you fill up your vehicle the information gets transmitted back to us and so we’re collecting data around that transaction.

    It’s a savings not just in terms of time but also in the ability to make sure we’re collecting data in the right way that allows the product to work better and making sure that it’s more secure.  It gets turned on at the point that the person hits that pump and then the pump is turned off as they turn off that transaction. It eliminates this concept of white plastic fraud. 

    We’ve Diversified the Business

    We have exposure to oil (prices), although less and less. Over the last several years in the company’s history, we’ve diversified the business so that we have less and less exposure to fuel. But as fuel prices go up we do have some benefit from that and when fuel prices go down we do have something negative to that. We’re very transparent. We talk about what the impact is and even when we give guidance we talk about what we’re assuming around fuel prices. 

    The biggest thing for us is we’ve diversified the business. When we first went public almost 70 percent of our revenues were exposed to fuel prices and now it’s in the 20s.

    Processes Consumer Hotel Payments For Expedia 

    If you think of a company like Expedia, when we go into the background they’ve got all these payments they have to make to hotels around the world and they’re getting payments in advance by consumers. What we do is make a connection to that individual consumer payment and make a payment on behalf of Expedia to the hotels around the world. 

    For someone like them or other online travel agencies, it allows them to focus on scaling their business and to not have to worry about this idea of many different payments to make. Also, if that consumer ultimately wants to buy a movie or do something that’s ahead of what they paid for we can block that. 

    A Fintech Provider For American Express

    Aa virtual card means card-not-present, no plastic. We started virtual cards many years ago and the idea behind that was being able to make a payment, typically an online payment, and doing it using an account number but without any physical plastic. You think about this concept of high integration, very seamless, you can facilitate a payment without having a card present and you can do this with huge transaction volumes. We have $76 billion worth of volume running through our company and you can do some of that with virtual cards.

    Someone like America Express comes to us because of the technology that we provide as a fintech provider. We want to make sure that we’re providing technology, integrating it through API’s, to businesses, to partners, to financial institutions, individually to companies, a whole host of different types of customer sets. American Express would be using the technology as a piece of their technology stack as they go out into the marketplace.

    Using Data From HSA Accounts To Advise Employers and Consumers

    Regarding health benefit services, if you have an HSA account or a flexible spending account we’re often the technology that sits in the background to that. When you are making a payment we’re making sure that you’re paying for things that are appropriate so that they’re health-related but also allow them to be made on a tax-deferred basis. We’re accumulating data around your purchases so that we can help advise employers around how much money should you fund into someone’s HSA account. Also, (informing on) how much should you as a consumer be directing into that account. 

    A lot of what we do is integrate the data that sits in the background and that’s important because it allows companies to do what they want to do. We sometimes grow, sometimes save money, but at the end of the day where we can pull data into the equation and we can show it to customers in a visual way that’s where the wow comes in.

    How WEX Has Dramatically Diversified Its Payment Solutions – WEX CEO Melissa Smith
  • Future of Fintech is Cloud, AI, Blockchain, IoT, 6G, and Quantum Computing, Says KPMG

    Future of Fintech is Cloud, AI, Blockchain, IoT, 6G, and Quantum Computing, Says KPMG

    The future of fintech is cloud, AI, blockchain, IoT, 6G and quantum computing, says Anton Ruddenklau, Global Co‐leader of FinTech at KPMG. Those are the technologies that are fueling the digital transformation and will be central to financial services in the UK and the world going forward.

    Anton Ruddenklau, Global Co‐leader of FinTech at KPMG discusses the future of fintech in an interview by Charlie Barrett, who is the FinTech Lead at AWS:

    By 2027 Large UK Banks Will Go Cloud Native

    The first tipping point is 2027. That is the date that IDC predicted when large UK corporate banks go cloud-native. They base it on spend analysis they get from CIOs across the industry. They say that 75 percent of the industry would have gone cloud native, the other 25 percent would have gone bust. There is an interesting thing.

    Just as a sidebar, we’ve seen one CEO who has already been fired in the last couple of weeks because they didn’t actually adhere to their cloud strategy, and that’s Sage. So it’s starting. People are getting serious about cloud.

    If you move back from those dates, what do the CIOs say? By 2020 they will spend more money on cloud services and data than they will on legacy technology. That’s a big tipping point for us and the cloud providers in the industry full stop. By 2022 the analysis shows that people will spend more money and resources on digital propositions and products supported by data and cloud than they will on legacy. We are moving to really a digital economy on financial services.

    Blockchain, IoT, 6G, and Quantum Computing

    The other one is blockchain which we think which is roughly between 2022 and 2024. That will be predicated on a number of things. Our tipping point analysis shows that ten percent of consumers and SMEs will have adopted distributed ledger cryptocurrency and that whole gamut of tokenization.

    Then the internet of things (IoT). The new 6G is coming down from the mobile operators which is specifically for sensor technology and location based services. That’s sort of early 2020s. That will really fuel up the connection of machine to machine and all the things we want to see as consumers coming through.

    Quantum computing is also a big one that is a big question mark for people. It’s super nascent right now. If we believe what people are saying to us, by 2024 or 2025 the quantum will arrive and that will just change the bandwidth for everything including the distributed ledger which really needs a lot of power to really make it work at scale.

    Machine Learning Baked Into Cloud Services

    More nearterm, I think for us is machine learning being baked into cloud services and cloud data warehouses? We see the likes of Amazon really moving hard on that and bringing machine learning to the masses. You don’t need to be a data scientist to do it. I think that is a fundamental change that’s coming. The small and medium sized fintech firms can adopt that a lot quicker.

    However, they don’t have the distribution in scale. The opportunity for us is to get the large banks to understand that. It comes back to new types of skills and moving IT from the back office to the front office.


  • It Takes Both High-Touch and High-Tech, Says Bank of America CEO

    It Takes Both High-Touch and High-Tech, Says Bank of America CEO

    Bank of America has gone massively digital and it is now powering their growth. “We had a billion and a half logins to our apps last quarter,” says Bank of America CEO Brian Moynihan. “This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.”

    Brian Moynihan, CEO of Bank of America, discusses the digitalization of banking with Fox Business at Davos 2019:

    Consumers Have a Branch in Their Pocket

    On the consumer side, they have a branch in their pocket. Anything you can do at a branch, in the traditional banking sense, or over the phone, you can do in your app. There are 36 million digital users, 26 million mobile users who are not digital users growing at 10-15 percent a year. Sales are at the 20 percent level and 25 percent of all sales are digital. Our digital mortgage product is growing. Our digital auto product is growing. What you can do is do everything.

    Half of the checks we have are deposited at the ATM and a little over 25 percent of deposits are by people taking pictures of them with their phone. It’s the exact same activity but you don’t have to go anywhere. You can do everything.  

    Then you have Erica. We have five million Erica users and it only started a little over a year ago. That’s where people can just talk and ask questions and it learns about you. It’s artificial intelligence voice recognition program. When you pay your bills you just say, “I need to pay X.” It will say, “You want to pay X, here is the amount.”  Think about how easy it is versus writing out checks or even going into digital bill payment. The technology enables consumers to do more faster and easier.

    Apps on the Institutional Side Getting Interesting Too

    The applications on the institutional side are getting interesting too. Believe it or not, corporate treasurers want mobile capabilities also. With Cashpro Mobile they can initiate a $5 million wire on a mobile device while sitting in a meeting with all the controls around it and all of the foreign currency features.

    To me, it was… really? But absolutely, that’s the way they want to do it because that’s the way they are used to operating.

    It Takes Both High-Touch and High-Tech

    We had a billion and a half logins to our apps last quarter. This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.

    What have we learned? We are always a curious company and always out their learning. When we go and talk to fintech companies or observe what they are doing, more importantly, we’re trying to learn what does the customer see in that activity that they don’t see in our activity? Then we look at how we can adapt to that.

    Are we interested in acquiring fintech companies? There will be no acquisitions, we just work.

    Small Business Still Very Optimistic About the Economy

    We do more small business than most of the people in the world. When you think about small business, what’s interesting is that the business community in the United States is very optimistic still. Even though they are not as optimistic as they were at the highest point they’re still very optimistic on a relative basis.

    In our small business surveys late last Fall they are saying, “We’re going to invest more. We’re going to hire more. We can’t get people.” Those are the common themes.

    I think it is a good year for investment as long as we solve a couple of key issues. We have to get the sutdown done. The incremental impact of the workers is important but it’s also just the process of getting approvals and stuff is being held up. Then ultimately the trade situation has to be solved. I’m not giving you any news, everybody says that, but it’s time to get some of this stuff done.


  • Cloud is Really the New Normal for Financial Services

    Cloud is Really the New Normal for Financial Services

    “Cloud is really the new normal,” says Scott Mullins, Head of Worldwide Financial Services Business Development at AWS. “If you look across enterprise companies and financial services today, the vast majority are considering cloud as a major part of their IT strategy going forward. It’s just picked up that much momentum. I think we’re just scratching the surface in cloud for the industry.”

    Scott Mullins, Head of Worldwide Financial Services Business Development at Amazon Web Services recently discussed how cloud has become a major part of every financial organization’s IT strategy:

    Financial Organizations Are Moving to the Cloud

    I get to actually lead a team of financial services experts whose sole function is to help our customers both from the standpoint of FinTech startups, all the way up to the largest banks, broker-dealers, exchange companies, and insurers use our tools. That’s what we do on a daily basis and we’re having a lot of fun doing it. It’s really fun to watch.

    I think the big stories in 2019 are going to probably be a couple things. The first thing is if we look historically back at the last several re:INVENT’s we’ve seen more financial institutions coming forward and talking about what they’re doing in the cloud. I think the reason for that is because we’re getting more muscle memory from these organizations.

    2019 Will Bring an Accelerated Transformation

    They’ve had experimentation, they’ve had some foundations they’ve been laying over the course of the last couple of years, and now they have confidence. They have confidence to do two things. Number one to move much more quickly to embrace these tools and to move more workloads over and to build net new things, but also to talk about it. Most financial institutions don’t want to talk about something until they know it well and they know it works for them and that they’ve really de-risked it for themselves.

    We saw Goldman Sachs last year. This year we saw Guardian Life Insurance talking about how they’ve changed the 158-year-old company and how they made it nimble and agile. They’ve actually been able to close data centers. I think we are going to see more of that. What that means is we’re going to see a much more accelerated transformation of the industry itself. I think we’re going to see more and more of those organizations coming out and talking about how cloud is a major part of their IT strategy going forward.

    Going to See a Much Richer Ecosystem of ISVs

    The second thing I think we’re going to see is a much richer ecosystem of ISVs. Just look across what we have today and what’s been announced this week. Bloomberg came out talking about B-Pipe on AWS. Refinitiv a couple of weeks ago was talking about the fact that Elektron runs on AWS. We’re working very closely with Broadridge. We’re working closely with Finical and Temenos and a lot of different vendors in the industry and that’s going to continue to happen at a rapid pace.

    Financial Industry Undergoing Massive Transformation

    The reason for that is twofold. Number one, you’ve got a lot of those customers who are going through massive transformations and they’re saying to their ISPs, I love the relationship that we have but I’m moving to the cloud. If we’re going to continue to have a relationship you’ve got to move to the cloud with me and those vendors are responding very positively.

    Or you’ve got some vendors like IHS Markit who several years ago said, you know what, the future of financial services is in the cloud and I need to start moving before even my customers are telling me so that I can be ahead of the game. Those are two things you’re going to see be very key themes in 2019.

    Cloud is Really the New Normal

    Cloud is really the new normal. If you look across enterprise companies and financial services today, the vast majority are considering cloud as a major part of their IT strategy going forward. It’s just picked up that much momentum. I think we’re just scratching the surface in cloud for the industry. There’s going to be a room for not just one cloud provider, but multiple cloud providers and opportunities for everyone.


  • Bank of America CEO: Digitalization Is Not Something That’s Coming, It Already Exists

    Bank of America CEO: Digitalization Is Not Something That’s Coming, It Already Exists

    Digitalization is not something that’s coming, this is something that already exists, says Bank of America CEO Brian Moynihan. He says that 25 percent of their sales are done on digital. Moynihan says his goal is to bring the whole banking system to the digital age to make it more efficient for customers.

    Brian Moynihan, Bank of America CEO, discussed the digitalization of banking and much more during an interview on CNBC:

    Digitalization is a Big Boon for Everybody

    Digitalization is a big boon for everybody in a sense in that you can continue to provide better service for the customer and take the cost structure down which then can pass through to the customer. The way to think of all this work on a consumer side is that we have 26 million mobile customers, 25 million digital customers, about 1.5 billion logins last quarter. This is not something that’s coming, this is something that already exists. About 25 percent of our sales are done on digital.

    Digitalization Improves Service and Reduces Costs

    All this is extremely important in how we run our franchise. What that has done for the customer is give them better services on their time, the way they want to do it, 24/7. At the same time, it reduced our operating costs so we can take out overdraft fees on point of sale debit, ten years ago now almost. What allowed us to afford that was to change the operating structure. That makes this very good.

    Small banks and larger banks are participating in digitalization. We helped small banks to drive digital payments. The volumes are growing 100 percent per year for us with that and across the board.

    Bringing the Whole Banking System to the Digital Age

    The goal is to bring the whole banking system more and more to the digital age and make it more efficient for the customers. The key is that on the commercial side it also goes on. Everyone talks about consumers, but on the commercial side, the same impacts going. CashPro Mobile, a product we have, is up and operating very efficiently. When you think that a treasurer of a company would sit down at their desk to do an interface to send it, they want their mobile interface because that’s their daily life. It’s all good for all of the companies.

  • Cisco: Financial Institutions Struggle With Pace of Technological Change

    Cisco: Financial Institutions Struggle With Pace of Technological Change

    The pace of technological change is possibly the biggest challenge that financial institutions are facing says Cisco FinTech Lead Al Slamecka. He says that the large financial organizations are zeroing in on automating the network management functions and the operations side of their businesses, which they call Intent-Based Networking.

    Al Slamecka, Financial Services Industry Lead at Cisco, discussed the challenges institutions are facing because of all that is currently going on in the FinTech space with Investor’s Business Daily:

    Financial Institutions Struggle With Pace of Technological Change

    The pace of change is probably the biggest thing large financial institutions struggle with. They continually face the pressures of seeing a lot of what’s going on from the FinTech space. As large organizations, they are continuing to try to evolve the way that they as a provider of a significant number of services can accelerate their innovation and accelerate their transformation. In that regard, from our perspective, there’s a lot that is dependent on their ability to provide greater automation and orchestration of the underlying infrastructure.

    Organizations Focusing on Intent-Based Networking

    We’re starting to see a lot more organizations look at the capabilities of automating the network management function and the operations side of the business, something that is typically called Intent-Based Networking. Essentially this accelerates their ability to allow the organization to be more agile from an application development perspective and from a partnership perspective with FinTech firms. There’s good momentum in that space currently. It’s an interesting time for them but we think that those organizations that are taking that fundamental view at their infrastructure are well on their way.

    Software Defined Networking is the Preferred Approach

    These are large institutions and so over the years, they’ve developed large complex networks to service their business. The challenge is one in which they need to get out of the business of doing what they used to do. Things like command line execution of management functions have been a real time-staking task, so to deploy automation they need more intelligence out of the solutions they deploy. Software Defined Networking is generally the approach that they’re taking both from the data center side, software-defined data center, as well software-defined campus and WAN.

    There’s a transition in the products that support that and they need to essentially upgrade their infrastructure with products that have the intelligence to provide the kind of visibility and manageability that they need. Then they also need to look at their own capabilities inside, the talent inside the IT organizations needs transformation as well. So there’s an upgrade both on the operational side as well as on the infrastructure and technology side.

  • Barry Diller on the Internet Revolution: Really Young, Truly Radical, Very Troubled

    Barry Diller on the Internet Revolution: Really Young, Truly Radical, Very Troubled

    Internet pioneer Barry Diller says that the Internet revolution is still really young. He also says that this truly radical revolution is right now a very troubled revolution.

    Barry Diller, Chairman and Senior Executive of IAC and Expedia, Inc., recently reflected on the relative youthfulness of the Internet and areas which are still ripe for entrepreneurs. IAC owns popular dating platforms such as Tinder and Match.

    Below are Barry Diller’s comments made during an interview on Fox Business which you can watch in its entirety below:

    The Internet Revolution is Still Really Young

    The growth is just part of the revolution. People forget that the internet revolution is still really young, only 22 or 23 years. It took 10-15 years just to get up enough bandwidth to actually have rich media being served through it. We are really at the very earliest stage of this.

    Expedia is one of the first companies to kind of colonize travel for the internet 20 years ago. That’s a world where the colonization of all these businesses is just now coming on ‘full line’ where you can do almost everything and almost everything more through digital platforms. So the growth is everywhere.

    Fintech is Just Now Going Mainstream

    Financial technology, Fintech, is just now really getting into very much mainstream. Big companies are being built for this. For us, it’s home services. Being able to the same thing you do when you want a car, being taken someplace rather than drive yourself, where you have an app and with Uber. Home service, which has been one of the most difficult areas to tame.

    It’s the most, essentially, local of everything. It’s where your water heater breaks, your air conditioning doesn’t work, just take it on the emergency or quick service side, and you want help. Now there is an app in Angie Home Services in Home Advisor where literally you do the same thing. You say I need a plumber and it will show you plumbers hovering around, Uberish like service providers, where you will be able to do the full-service of that transaction on your mobile device because it’s there and it’s ready for you.

    It’s Really a Platform

    That is just now at it’s very earliest stages. It’s just one example where the growth runway is infinite. It’s really a platform. The platform takes consumers over here who have needs and service providers over here who provide services and through technology, it makes a perfect match or at least a good match.

    That’s what all of those things are, they are platforms. Once you have a platform then when you say will others be created, well certainly there will be other platforms created, but there won’t be that many because the network effects have to come into play.

    Tinder is Now Moving on the Same Track as Match

    We’ve been involved in Match almost 20 years I think. We bought Match quite early in the cycle. We found that… you know what, that’s a very good idea. We found this little company in Texas called Match.com which we bought. The thing is when you say it’s just now becoming where people get married, we had over a million marriages ten years ago come from Match.com.

    Then the technology moved forward and you have Tinder, which is actually younger in terms of people. People on Match were fairly serious, yes they wanted to date and see what happened on a little one-time date, but they also really wanted relationships. Tinder got younger and earlier stage of pre-relationship, one-time dating or one-time whatever. But now, it is moving on the same track as Match did where real relationships are coming out of Tinder. It’s an alternative to the historic pattern of going to bars or being fixed up. This actually does bring technology into the mix.

    This is a Truly Radical Revolution

    When you are inside of a revolution, which I was just lucky enough in timing to get into in a very early stage, you don’t realize the effects of what is happening around you. This is a truly radical revolution. Right now it is a very troubled revolution which happens at very early stages.

    Part 1 of Barry Diller interview on the Internet Revolution:

    Part 2 of Barry Diller interview on the Internet Revolution:

  • Brex Raises $57 Million to Launch New Credit Card for Startups

    Brex Raises $57 Million to Launch New Credit Card for Startups

    American fintech company Brex has just launched a new corporate credit card designed specifically to assist startups.

    The news of this unique credit card also comes on the heels of Brex’s recently concluded Series B funding round. The company was able to raise $57 million courtesy of investors like PayPal co-founders Max Levchin and Peter Thiel, Facebook’s Yuri Milner, VC Ribbit Capital, and the Y Combinator Continuity.

    Brex is the brainchild of young engineers cum entrepreneurs Henrique Dubugras and Pedro Franchesci. The two are known for founding Pagar.me, a Brazilian payments processor, when they were still in their teens.

    Brex wants to rebuild B2B financial products, and one key step to doing that is to start with a corporate credit card service. The company provides tech startups and various companies with instant approval of credit cards. What’s more, these have higher than expected credit limits and users don’t require any kind of personal guarantees.

    The San Francisco-based company basically underwrites businesses and foregoes credit history in lieu of factors like its investors and the equity the company holds, its cash balance and spending habits. Brex offers the first five cards of the startup free of charge. Any additional cards after that will cost $5 monthly.

    Brex credit cards offer several distinct features, like the capacity to capture receipts using your smart device and matching them to the card holder’s credit statement. The card can also be integrated with accounting software like Expensify, NetSuite, and QuickBooks.

    Dubugras and Franchesci reportedly spent the previous year talking with customers about developing a product that could successfully navigate the regulatory and financial challenges that usually prevent early-stage startups from getting credit card approval.

    According to Brex CEO Dubugras, “startups that have raised millions and are poised for hyper-growth can’t get slowed down hassling with banks requiring personal guarantees and offering meager credit limits.”

    Unfortunately, traditional credit models look at how much a company can pay back annually based on revenue. This practice automatically disqualifies startups. But Brex has gotten around that problem by focusing on the cash that the investors have given the startup.

    [Featured image via Pixabay]