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Skin in the game: The rise of biometrics in fintech
FinTech
<p>Passwords are not only out of date but are also dangerously insecure in a world where more and more of our daily transactions are becoming digitized. It only follows, then, that as financial technology has evolved, so have the biometric methods of authentication. Here are some of the innovations currently being adopted by different companies:</p> <p>Fingerprint recognition: This is probably the most widely used form of biometrics in existence today. The feature has existed on the Apple iPhone since 2013 and now adds an extra layer of security to the tech giant's contactless payments system, Apple Pay. The tech is now becoming a common feature among smartphones. Other tech giants, like Samsung, are also using it for payments verification.</p> <p>Facial recognition:  With all smartphones and ATMs now equipped with cameras, facial recognition is also becoming widely adopted. Earlier this year. The Wall Street Journal reported that American Express Co. had become one of the most high-profile institutions to experiment with facial recognition tech. The idea is that the technology could offer new capabilities for some of the firm's mobile apps, and new products aimed at customers underserved by financial services.</p> <p>Voice recognition: One of the hottest startups in the voice recognition space today is SayPay Technologies. The company – which recently won the APAC regional UBS Future of Finance Challenge – lets user say a unique SayPay code into a phone which allows the phone to authorize a transaction by matching the voice pattern with a database.</p> <p>Retina scan:  According to the WSJ, Citigroup is that latest to adopt this technology by teaming up with automated-teller-machine maker Diebold to develop a machine that would allow customers to withdraw money with an eyeball scan instead of a card swipe. But, quite rightly, the WSJ article asks whether consumers -- already suspicious of large financial institutions -- would be comfortable letting a bank scan their eyeballs regularly.</p> <p>Palm vein recognition: Japanese bank JCB made headlines last month when it unveiled a partnership with Fujitsu to develop a contact less payments system that incorporates the Japanese tech company’s palm vein authentication technology into JCB's global network. The technology is meant to be more difficult to falsify than fingerprint technology.  Fujitsu already claims to have shipped 470 of devices using the tech.</p> <p>A combination: Of course the best use of biometrics would be a combination of the some of the above. That is the approach the Deutsche Bank is taking with its new Callsign antifraud system. Nick Doddy, Deutsche’s regional innovation manager, recently explained to the Financial Times how the system can adjust to multiple profiles:<br /> If you’ve broken your right arm and . . . you’re at home and now you’re using your left hand, it will say her location is good, her pin is good, her biometric is good, but she’s now handling it in a different way, so it might say ‘give me a facial recognition’<br /> Photo: CPOA</p>
WhatsApp connects Indonesia
FinTech
<p>Technology leapfrogging in emerging countries is hardly a new concept. The use of mobile phones is perhaps the best example, obviating the construction of expensive infrastructure or bricks-and-mortar outlets.</p> <p>WhatsApp has spotted the enormous potential of Indonesia, a sprawling archipelago of more than 250 million people with rising personal incomes. As the Financial Times (paywall) reports:<br /> [The] chat app is used by anyone from businessmen arranging meetings to girls sharing images of their latest batik blouse, and its calling function is as central to daily life as free messaging.</p> <p>At the recent Tech in Asia summit in Jakarta, Thomas Lembong, a senior cabinet member, declared that he runs the government’s trade ministry through WhatsApp. And it is the same story with many chief executives in the country.</p> <p>There are particular advantages to using the service in emerging market cities such as Jakarta, where many offices and cafés offer free WiFi. That means bypassing not only mobile operator tariffs but also any problems with poor signal.<br /> Photo: Charles Wiriawan</p>
SoFi's expected $30B IPO adds fuel to the Renren fire
FinTech
<p>Back in March, Benzinga covered the intrinsic value of fintech investments made by fading Chinese social media company Renren Inc RENN 0.85%.</p> <p>Among Renren's many investments, its approximate 25 percent stake in SoFi looked to be the most promising, as the company was looking to IPO at around $3.5 billion. On Tuesday, Business Insider's Jonathan Marino said SoFi CEO Michael Cagney was now looking for a $30 billion dollar IPO.</p> <p>Cagney cited Dodd-Frank Wall Street Reform and Consumer Protection Act as the boost that accelerated its expected IPO valuation 10 times as much as what had been reported in March. One might be led to believe that investors in Renren would be ecstatic regarding this news.</p> <p>However, management led by Renren CEO Joseph Chen is looking to take the company private at $4.20; Shares traded recently at $3.50.<br /> Laughable Offer<br /> Aptus Capital's John Romero told Benzinga, "If and when SoFi reaches a $30 billion market cap, this translates into $17 for RENN which is an asymmetrical return from its present share price of $3.50. Knowing SoFi's long-term objective just underscores how laughable the non binding offer of $4.20 is from present management."</p> <p>Read more at Benzinga. <br /> Photo: Alexey Krasavin</p>
Sweden declares war on cash, punishes savers
FinTech
<p>&nbsp;</p> <p>Among the endangered species in Sweden are the gray wolf, European otter—and cash. Back in June, I shared with you the story of how, in 1661, the Scandinavian monarchy became the first country in the world to issue paper money. (It was an unmitigated disaster, by the way.) Now it might be the first to ban it altogether.</p> <p>All across Sweden, cash—the physical kind, not cash in the bank—is disappearing. Many if not most businesses have stopped accepting it. ATMs are now as uncommon as pay phones. Churchgoers tithe using mobile apps. Fewer and fewer banks even accept or dole out cash.</p> <p>Here’s the chart showing the decline in the average yearly value of Swedish banknotes in circulation:</p> <p>SwedenSo what’s going on?</p> <p>For one, the Swedish people have enthusiastically embraced mobile payment systems. Even homeless newspaper vendors now carry card scanners.</p> <p>But that’s not the concerning part.</p> <p>Cash’s demise appears to be orchestrated by Sweden’s central bank, which of course stands to benefit from the switch. In a purely electronic system, every financial transaction is not only charged a fee but can also be tracked and monitored. Plus, taxes can’t be levied on cash that’s squirreled away in Johan’s sock drawer.</p> <p>Since July, interest rates in Sweden have lingered in negative territory, at -0.35 percent, forcing accountholders to spend their money or else see their balances slowly melt away. Negative rates can also be found in Denmark and Switzerland, where they’re as low as -1.25 percent. The Swiss 10-year bond yield plummeted to -0.40 percent on Tuesday, which means people are paying the government to hold their “investment.”</p> <p>Nick Giambruno, senior editor of Casey Research’s International Man, calls negative interest rates in a cashless society a “scam.”  His perspective is worth considering:<br /> If you can’t withdraw your money as cash, you have two choices: You can deal with negative interest rates… or you can spend your money. Ultimately, that’s what our Keynesian central planners want. They are using negative interest rates and the “War on Cash” to force you to spend and “stimulate” the economy.</p> <p>The War on Cash and negative interest rates are huge threats to your financial security. Central planners are playing with fire and inviting a currency catastrophe.<br /> Sovereign Man goes even further, writing:<br /> Financial privacy has been destroyed. Banks are now merely unpaid spies of bankrupt governments, and they will freeze you out of your life’s savings in a heartbeat if some faceless bureaucrat orders them to do so.<br /> Read more in ValueWalk <br /> Photo: Quan</p>
Deutsche Bank upgrades its business with robo-adviser
FinTech
Deutsche Bank has just become the latest among a growing group of asset managers incorporating robo-adviser technology. The German investment bank’s latest tool, AnlageFinder, was developed with fintech firm Fincite and uses questionnaires and algorithms to tailor equities portfolios for existing customers, Reuters reports. Deutsche Bank is keen to keep up with industry peers, and the new platform is way
Aussie firm ranks as Asia's fastest growing fintech startup
FinTech
When it comes to fintech in Asia Pacific it's Hong Kong and Singapore that seem to be getting the most attention, yet it was an Australian startup that clinched the top spot for fintech in the latest 2015 Deloitte Technology Fast 500 Asia Pacific. The list, which tracks the fastest growing tech companies in the region, ranked Sydney-based Prospa -- an
Cybersecurity is no longer an IT issue
FinTech
Cybersecurity is not the biggest threat facing the financial institutions of tomorrow, it’s the biggest threat facing the financial institutions of today, say industry professionals, and it needs to be tackled differently. Speaking at ASIFMA's annual conference in Hong Kong’s Conrad Hotel on Thursday, Ben Wootliff, managing director at Hong Kong-based risk advisory Control Risks said: Cybersecurity is no longer
JPMorgan teaming up with OnDeck Capital for lending
FinTech
JPMorgan won't be left behind. The biggest U.S. bank is tying itself to OnDeck Capital, one of the biggest online lenders, to offer small business loans. The pilot project will launch in January, with Chase, the main U.S. banking unit for JPMorgan, offering loans of up to $250,000 to its 4 million small business customers through the OnDeck platform, reports
WeConquer: WeChat is turning its social network into a fintech empire
FinTech
WeChat is fast becoming one of the biggest players in fintech. The 650 million-strong social network, owned by Tencent, has been offering payments to its users in China since early 2014 but now its expanding aggressively overseas. The first big move in this direction came last month when it  partnered with Western Union to allow users to send money to
South Korea approves first online only banks
FinTech
<p>South Korea's financial regulator has granted preliminary approval for the launch of online-only banks by two groups of investors.</p> <p>On Monday, the Financial Services Commission gave a cautious go-ahead to telco KT Corp and Alibaba’s Alipay-led consortium of 21 companies that plans to invest KRW250 billion ($215.37 million) in its venture. The second group of 11 companies is led by mobile chat operator Kakao and boasts Tencent and eBay among the partners, and it intends to spend KRW300 billion.</p> <p>What's striking is the country's welcome embrace of dominant overseas fintech payments operators, in contrast to its continued reluctance to trust its homegrown chaebols to open up banks.</p> <p>In a bid to spur growth in its banking sector, South Korea is allowing non-financial firms to open banks but it still bars large industrial conglomerates such as Samsung Group and Hyundai Motor Group from taking part, says Reuters.<br /> Photo: Sébastien Bertrand</p>