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Fintech Startups Or Traditional Banks – Will The New Financial Entities Replace The Traditional Banking Titans

Posted on October 11, 2022 | by Signzian

There are 6,636 fintech startups in India, which has one of the fastest-growing fintech sectors in the world. The market for Indian fintech is expected to be worth $150 billion by 2025. But while the industry soars, traditional banking is the one that takes the hit. As a result, conventional methods are dropped for improved digital solutions.

Hence the question arises, “Will fintech startups replace traditional banking?” Well, to answer that, we must fully understand the entire scenario. So let’s have a look at it.

Valuing Fintech Startups

The approach used to value fintech businesses relies on various factors, including the industry they serve and where they are in their lifecycle.

Traditional approaches, such as the discounted cash flow method, comparable transaction method, price-to-earnings ratio of comparables, etc., can be used to value mature companies with an established company and stable cash flows.

There are specific approaches that can be used for valuing investments for very early-stage fintechs if they have not yet attained a critical mass or market share in a particular area or niche market. This can be the scorecard valuation method, Berkus method, risk factor summation method, venture capital method, etc.

Specific multiples can be applied for the valuation of a fintech that has visibility based on the business segment. For instance, a fintech business with a loan portfolio can be valued using the enterprise value to loan book ratio. A company involved in payments can be valued using a multiple for transaction value or a comparable ratio of enterprise value to the number of active users. A fintech business in asset management can be valued using the enterprise value to assets under management ratio, etc.

Fintech Startups Are Sweeping Into Traditional Banks Territories

According to statistics, traditional banks in India have lost one-third of new revenue due to current fintech startups. Apart from the payments business, which is how the fintech space started, many segments, even in the Indian fintech space, offer solutions in specific financial areas like peer-to-peer lending, insurance, wealth management, and digital payments. All of these have enormous growth potential.

Therefore, for firms functioning in the fintech category, it is not about EBITDA or profitability but instead being in a sector with an addressable market, much like conventional startups.

Because of this, a purely low-margin payment business may not have much value and may not be bought out by businesses looking to create an ecosystem or established companies looking to gain a technological edge. This was the case when Axis Bank bought Freecharge, and Bajaj Finance launched Bajaj Pay while simultaneously launching five marketplace products to become a fintech eventually.

We can also observe that the time of only operating in the payments sector is finished, as many fintech has moved on to creating an ecosystem. Once a fintech has an ecosystem, there is a significant chance to cross-sell due to the big addressable market.

Based Valuation For Fintech Startups

The optimum method will be to evaluate these firms on a SOTP (Sum Of The Parts) basis for businesses having varied risks and rewards, depending on the sub-sectors of the industries like payments, lending, investments, etc.

A fintech could represent various sub-sectors, yet under current law, none of these may call for a banking license. In addition, several industries don’t need a banking license, like wealth tech, insuretech, peer-to-peer lending, etc. Therefore, the majority of financial startups are emerging in these industries. For example, consider Cred, a fintech with a fantastic data bank to use the data for cross-selling.

Fintechs provide P2P payment services despite not possessing a banking license; however, this is restricted by the fact that they cannot store customer funds as deposits. On the other hand, banks constantly lose consumers to these fintech companies. Banking as a Service (BaaS), which enables banks to share their infrastructure with these fintech businesses, is thus emerging due to the collaborative atmosphere between banks and fintech players.

We can see why having a banking license could benefit fintech by giving them a technological advantage, allowing them to grow up more quickly, and giving them access to a vast data mine for cross-selling.

Where Fintech Banking Is Headed

Several fintech businesses have applied for and been granted licenses to operate as banks during the past couple of years. An instance in point is the recent purchase of a Small Finance Bank by PhonePe and Centrum. The fintech industry aims to challenge the status quo through innovation, agility, and quick decision-making.

Although it may seem illogical for these businesses to choose the traditional banking route, one must keep in mind that these fintechs are disruptive because of the technology they provide, which is precisely what the traditional banking system lacks.

As a result, fintech companies are creating more than just ecosystems. They are also creating marketplace platforms for fintech companies, such as the insurance platform Policybazaar, which recently announced partnerships with Paytm, Ola Financial, private sector lender IndusInd Bank, and a small group of consortium participants. This was to create a New Umbrella Entity (NUE) for a national payments infrastructure company.

In Conclusion

As previously stated, many major banks have made attempts to partner with or buy fintech startups to develop their digital products. Meanwhile, fintechs are presently attempting to resemble banks. As a result, we may observe a wide range of fintechs across areas working toward gaining a banking license, from payment businesses to lending marketplaces.

It is important to note that all financial institutions must improve their financial processes. If you represent a financial enterprise, we might be able to help you with quality resources. Signzy’s AI-driven No-code products and services can improve your processes.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Healthcare Industry And Digital Onboarding- Top 3 Tips On Onboarding Doctors

Posted on October 6, 2022 | by Signzian

The global digital health market size exceeded USD 195 billion in 2021 and is expected to grow at a CAGR of over 16% by 2030. The market will expand as demand for remote patient monitoring services increases. This must put a smile on your face if you are advocating an enterprise in the digital healthcare industry. But there are particular concerns that you need to keep in mind and address.

You are eager for your patients to meet the ideal doctor who has joined your team. However, before that can happen, they must be incorporated into your organization; this is where many healthcare industry businesses falter. Manual transfers between internal and external departments, problems with credentials, and physician engagement are typical obstacles to physician onboarding. In addition, delays in physician onboarding can result in weekly revenue losses of up to $100K, and bad onboarding has been linked to higher employee attrition.

According to the New England Journal of Medicine, when you factor in the expenditure of recruiting, onboarding, and yet another vacancy and hiring situation, the total cost of hiring a physician who doesn’t fit and then quits can easily approach $1 million. Effective onboarding may support your retention efforts and boost productivity, performance, and morale. It’s essential in the current market, devastated by the pandemic, as the United States could have a physician shortage of up to 124,000 primary care and specialty doctors by 2034. Delivering a superior onboarding experience is your secret weapon in the battle for medical talent, especially given that just one in three doctors claim to have had formal onboarding.

Fortunately, these following 3 tips will help you significantly enhance the physician onboarding experience for the doctors in your organization.

1. Automate Onboarding In The Healthcare Industry

The process of onboarding doctors can be laborious and challenging. The physician onboarding process is made simpler for everyone involved with automated workflows. It promotes process transparency and eliminates the chance of human error in manual involvement. As recommended, every workflow and trigger should be incorporated into the automated process. This will make it possible for everyone, regardless of department or whether they are internal or external, to participate in the onboarding strategy. In addition, physicians are prompted along the route with advice on what to do thanks to automated digital onboarding.

This gives your healthcare industry personnel the ability to consistently deliver an excellent, standardized digital onboarding experience and knows exactly where a physician is at any time along the process. It is especially crucial during the drawn-out and critical credentialing procedure since the tracking capability and precision minimize the guesswork and unpredictability of the human method.

2. Provide A Mobile-Device Digital Onboarding Experience

Simplify the holistic employee experience for your physicians and team by delivering a beautiful user experience and enabling them to access their onboarding information and prompts on their chosen mobile device. Never let them fret about what comes next or wonder whether they missed a step.

3. Engage All Your Physicians

Regardless of tenure, properly onboarding your physicians helps them feel more connected to your healthcare industry enterprise and gives them the tools they need to provide the most excellent care for your patients. Efficacious employee engagement strategies include:

Preboarding
Follow up with a kind email, letter, or welcome-to-the-team gift box between the offer letter and the first day. Before they even arrive on the first day, give them the impression that they are a valuable and significant part of the company.
The first week
Put your attention on making them feel at ease. Introduce them to the teams they will be working with, host a team lunch, and pair them with a mentor or friend. These social connections play a significant role in forging a relationship with your company.
Opportunities for an ongoing engagement
Promote honest dialogue and foster inquiry. To stay in touch, host an internal focus group or send email surveys.

We advise internal discussion of your engagement strategy and creating an engagement program consistent with your company’s goals and values. For example, you want it to seem powerful and authentic instead of some generic engagement program. In addition, by standardizing the procedure and incorporating the phases into your automated workflow, you can ensure that each physician receives the same level of attention to engagement through digital onboarding.

How Can We Help With Onboarding In The Healthcare Industry?

You can chat with our team of specialists in employee experience. We’re available and prepared to assist you with automating the onboarding procedure so that your new hires are pleased. We’re only a click away when you’re ready for your physician digital onboarding plan to put people first and let the process take care of itself.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Law Firms In The Era Of Technology- 5 Tips For Lawyer Digital Onboarding

Posted on September 27, 2022 | by Signzian

The law firms and institutions in the legal industry are developing quickly, just like many other sectors. Therefore, automation and digitization of typical corporate activities will be essential in the constantly evolving legal landscape.

It can occasionally be difficult to onboard new clients or attorneys. The delays that the onboarding process creates constitute a significant problem for businesses. In addition, lawyers have to work hard for their clients, which makes it challenging to complete tasks quickly.

Above all, a solid attorney-client connection is essential for your company to expand, attract new clients needing your services, and keep those you already have. But unfortunately, HR technology can be the crucial component missing from your company’s success.

The speed with which companies can help onboard new customers and attorneys, thanks to technological advancements, can speed up the process of doing case research and training new associates. Therefore, when you implement new technology into your company, you will gain a lot of advantages.

Here are some pointers and techniques you may utilize when introducing new technology to your business to welcome clients and employees.

1. Complete Tech Supplier Research

You must thoroughly research the tech supplier you want to choose. Then, before transitioning to a digital onboarding system, understand how much your law firm can afford and budget accordingly. These steps will ensure that your law firm receives the best service possible.

The Link app, connected with artificial intelligence (AI) identity verification and electronic signatures via DocuSign, is one example of recent developments in HR technology. Your business can keep ahead of the curve by locating competitive technology providers that provide cutting-edge systems.

2. Assess Workflow Management In Law Firms

Before using new technology, reviewing your current onboarding process and addressing the shortcomings that clients or associates experienced will pay off. Perhaps there weren’t enough training materials, or clients felt disconnected from the process.

You might use an online workflow management system at your company. Using top-notch workflow software makes assigning duties while onboarding new staff much simpler.

3. Provide Virtual Teleconferencing Options In Law Firms

Knowing how important you are to those requiring legal representation should persuade you to give your clients top-notch service constantly. Your law firm’s clients and associates’ trust in you as their advisor should always come first. Using digitization instead of a paper-based approach or relying solely on phone calls, you can distribute legislative updates to everyone more swiftly.

Remember that authenticity is the most significant policy when practicing law because it will bind your law firm together. If you want to onboard clients remotely, platforms like Zoom and Google Meet are two good choices. Even if it necessitates spending time electronically, increasing face-to-face encounters during onboarding can increase productivity and talent retention.

4. Consider Cloud Technology for Digital Onboarding

Consider making the transfer to a cloud server if your company hasn’t already. With a private cloud server, you can manage where your data is kept and keep a close eye on who has access to sensitive data. Scalability, lower expenses, less paper consumption, and efficiency are just a few advantages your company can take advantage of to stay one step ahead of the competition by utilizing cloud technology.

Whether you want to run your business using Amazon Web Services or Google Workspaces, cloud server platforms offer your company the best security features to safeguard your data from potential intruders. Additionally, using a private cloud gives your law firm more freedom and flexibility because anyone may access any information.

5. Be Patient With New Applications

Any new system that is integrated into your processes has a learning curve. Therefore, your law firm will need to exercise patience during these transitional times for your clients to understand that onboarding is a process that takes time and set realistic expectations for them. This is irrespective of whether it involves implementing a new cloud server infrastructure or maintaining digital recordings of legal documents.

By registering for cloud server applications you can get assistance with several duties, like updating clients via their messaging platform and exchanging crucial onboarding paperwork. It’s essential to correspond because it keeps lines of communication open inside your company.

Technology in the In Law Firms And The Legal Sector

We are all aware that technology enables us to complete more of our professional objectives efficiently. Using the most recent technology will help you better serve your customers, whether you’re onboarding them or using video conferencing to have a first-time meeting with them. The investment will eventually pay for itself.

Other industries like finance and healthcare have already adapted to automation to a great extent. Even insurance goliaths, infamous for their late adoption of technology, are churning fast to catch up. It is only a matter of time before the legal industry does the same. So, to be ahead of the curve, you should find a good onboarding service provider. It would be your first step in the road ahead. We at Signzy can help you with this. With our state-of-the-art technology and simplified no-code API resources, you can fast-track this swiftly.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Blockchain Technology In The Indian Fintech Industry- How Will The Technology Venture The 2020s?

Posted on September 27, 2022 | by Signzian

Did you know that the global market for blockchain technology will be worth $67.4 billion by 2026? The biggest market value distribution for blockchains is found in the banking industry. India is presently seeing the introduction of this technology.

India has developed into a significant global fintech industry hotspot and has given fintech start-ups considerable space. Covid-19 sped up the fintech sector’s expansion, which is now experiencing record investments and an explosive increase in the use of its services. It was essential for the financial industry to transition to app-based operations as sectors shifted to digital platforms.

The fintech industry has gone a long way with encrypted logins, full access to financial data, and practically all functions available at your fingertips. App-based processes do, however, need less time and effort, but it’s unlikely that they will result in secure transactions, protection against fraud, or transparency to prevent any wrongdoing. Here, blockchain technology has the potential to improve and even completely transform the entire tech-based financial industry.

Understanding Blockchain Technology

A blockchain is a decentralized, open, and distributed digital ledger that keeps track of transactions across numerous computers in such a way that any changes to the record would impact all following blocks and the network consensus. Increasing and leaving its mark in every industry, including fintech, real estate, agriculture, and healthcare, this mushrooming technology is expanding.

Boosting The Booming Fintech

It is clear that with blockchain technology, conventional financial processes may be completely transparent and based on fast, secure transactions. The new fintech transactions can create peer-to-peer networks, quick transactions, and total transparency without needing an intermediary.

Blockchain focuses on lowering the risk for financial institutions and offering secure, encrypted data that are safe and unmodified, potentially making the financial industry more transparent, less vulnerable to fraud, and less expensive for consumers. This enables the industry to concentrate on artificial intelligence- and machine-driven intelligence-based decision-making.

Financial Management Without Banks

Digital wallets, digital payments, and digital lending have all established new market segments due to the expanding new-age client sector. Blockchain technology can effectively govern this ecosystem. Blockchain-integrated digital wallets are protected by private keys while possessing their unique public address, allowing them to send and receive payments. With blockchain technology, wallet holders with private keys are the sole owners of the assets, unlike traditional currency, where banks take responsibility for holding money.

The Relevance Of Digital KYC

Trust and identification have always been difficult to establish in a financial transaction. Blockchain technology will be essential to automate the manual, paper-based, time-consuming, and expensive process of maintaining clients’ up-to-date records through digital KYC. igitization has enormous potential to keep data correct and foster genuine trust among parties conducting online business. Customer consent, data theft, and identity theft are essential parts that facilitate the task for all parties.

Borderless Payments With Blockchain Technology

Financial institutions can concentrate more on improving the speed and effectiveness of payment choices as the industry shifts toward borderless transactions. In addition, regulating the resources required to authorize payments and making them convenient for international payments further lowers the total cost of ownership.

Blockchain technology will revolutionize the fintech industry. Blockchain technology has excelled in the modernization of traditional financial institutions that fintech has risen to do. In addition, the data privacy advantage of blockchain has been building up the much-needed trust between users and providers in the fintech industry.

With an increasing focus on payments, closely followed by securities and trade finance, blockchain will focus on evolving complexity and delivery timeframe, improving financial institutions’ operational efficiency.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Top 10 Fintech Company Business Models Set To Take Over The Fintech Industry

Posted on September 19, 2022 | by Signzian

Did you know that as of 2022, the fintech industry is worth $179 billion with approximately 30,000 financial technology startups? Those are big numbers for an industry as young as the fintech industry. Moreover, now a usual fintech company primarily is capitalizing on the numerous services traditional banks provide, such as account opening and insurance underwriting, and turning the old business models in financial companies on their heads.

The fintech sector is receiving a tonne of venture capital funding, and “challenger” banks are threatening to eliminate banking behemoths more quickly than Netflix eliminated Blockbuster from the game. So let’s examine ten cutting-edge fintech company concepts paving the way for disruption and growth.

Progress In P2P lending

Peer-to-peer (P2P) lending is the practice of a person borrowing money from another person. Like this, peer-to-business (P2B) lending occurs when a company borrows money from a single or group of people. By directing their funds to pre-approved and carefully screened borrowers, these lending models make it simpler for investors to obtain higher returns than those provided by debt markets. Companies in the fintech industry build platforms to connect borrowers and lenders and typically deduct a charge from the borrower’s repayment.

The Magic Of Digital Wallets

We can compare a no-frills bank account and a payment gateway to digital wallets. This business model allows customers to pre-load a set amount of virtual currency into their wallets, which they can then use to make online or offline purchases from businesses that accept digital wallets.

Providing users with the convenience of making payments for a small fee that is typically charged to businesses is the basic tenet of a digital wallet business model. These can be in the form of a merchant discount rate (MDR) and through the float that they would make on the money that is sitting unpaid in customer/business accounts. Businesses that provide their customers tangible goods or services in person are the typical end users of wallets, for example, Venmo, Square Cash, Google Pay, etc.

Digital Banking Revolution- The Fintech Company Impact

Imagine your local bank closing its physical location and moving entirely online. There would be no bank tellers, no mail, and no real offices. Instead, challenger banks provide no-frills personal and commercial bank accounts through a fully developed digital infrastructure. The business strategy used here is much the same as that of a bank with physical branches, except that consumers can significantly benefit from lower rates thanks to the significant labor and real estate cost savings.

Safety For Everyone, Everywhere With Digital Insurance

A standard fintech company in the insurance sector brings all of the conventional services online, just like digital banks. These Fintech companies can offer life and health insurance with superior underwriting procedures while aggressively undercutting traditional insurance providers because they can charge variable premiums based on the customer. These insurance policies can open up commercial opportunities that insurance firms have just begun investigating when combined with targeted marketing.

Access Transaction delivery

The ability to effectively manage data can provide invaluable insights into the demands and desires of the client. Data is the new oil. To gather customer data and then share it with the rest of the group to map the customer’s capacity to pay premiums, invest in real estate, buy mutual funds, etc., financial technology entrepreneurs in the transaction delivery space are developing free solutions, including cost management apps. A standard fintech company operates under a commission-based business model by reselling financial products from third parties.

Even A Single Fintech Company Ensures Safer Payments With Gateways

Payment gateways allow customers to pay for goods and services on a retailer’s website. Various payment options are available today, including cryptocurrencies, digital wallets, debit cards, and credit cards. Unfortunately, banks typically impose astronomical fees for processing transactions from these numerous channels. Still, fintech companies are combining these payment channels into practical apps that internet retailers can easily afford and incorporate on their websites. Businesses offering tangible goods or services to end customers are the typical users of these payment apps, such as Stripe, Alipay, and iZettle.

Easy Asset Management

Have you ever heard of buying mutual funds or stocks without paying a commission fee? In exchange for their data, fintech businesses are allowing investors to trade for free. They deliver this information to high-frequency traders, who can then affect the asset’s price. The investor may pay a little higher price for their asset, but there is still a positive differential between what they save on trading fees and the marginal price rise.

Small Ticket Loans Have A Big Market

Due to the poor margins and significant setup and recovery expenses associated with smaller-price loans, banks and other lenders often do not want to underwrite them. A standard fintech company in this industry segment (like Affirm) offer one-click buy buttons and impulse buy mechanisms on e-commerce websites to let clients make quick purchases without submitting any authentication or credit card information.

We can buy almost anything outright with the opportunity to pay in installments. This is thanks to the average 0% interest rate at which these loans are underwritten. So how does one make money? By disclosing customer information to the original equipment manufacturers (OEMs), who stand to gain the most from the decreased cost of these gadgets. Highly individualized marketing offers are ensured with algorithms that ascertain customer demographics. Consider sharing your data with them as the loan’s interest.

Alternative Credit Scoring

Due to stringent and antiquated credit score standards, many self-employed people with a reliable source of income fail traditional bank loan screens. By taking into account alternative data points like social signals and percentile scores among comparable borrower groups, a standard credit rating fintech company adopts novel strategies. With time, better lending judgments may result from combining all these qualitative factors with an intelligent and self-learning algorithm. For instance, a lender can avoid dealing with loan recovery if there is a means to identify unfavorable profiles based on social presence before loan disbursement.

Alternative insurance underwriting

Two people today who are the same height and weight, don’t smoke, and don’t consume alcohol will receive the same life insurance premium. But one individual can be a fitness fanatic, while the other might be a couch potato who is more likely to get diabetes and pass away from it. Since risk premiums currently don’t account for characteristics that aren’t quantifiable, average out (also known as normalizing in actuarial terminology) leads to these incorrect premium computations.

Fintech businesses are developing variable premium computing processes utilizing alternative data points like social signals, lifestyle, and medical history, similar to alternative credit scoring. These InsureTech firms may decide whether to offer insurance, present various terms and conditions and provide numerous payment choices when combined with intelligent and self-learning algorithms (for example, co-pay options).

The Bottomline

Fintech firms have a considerable role to play in the futures of almost all industries. They are revolutionizing both precedent and retrospect. As the world evolves, fintech innovates.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

AML Compliance Culture: Why It’s Important And 4 Ways To Create It

Posted on September 1, 2022 | by Signzian

Did you know that the anti-money laundering software market is projected to reach $1.77 billion by 2023? This is primarily because all institutions and governments want to stop money laundering. These illegal activities cost the world 2% to 5% of its GDP.

Although corporate culture has become very popular, the AML Compliance Culture is a new yet essential element in financial companies, which can impact the broader cultural challenges that the firm may face. Businesses must build their AML compliance procedures on a solid culture because there are numerous examples of how a poor compliance culture may harm the company.

What Exactly Is AML Compliance Culture?

AML culture may not have a specific phrase, but the idea is gaining popularity on a global scale. Experts believe that a weak compliance culture in enforcement efforts is the primary cause of weaknesses in the anti-money laundering (AML) and counter-financing terrorism (CFT) frameworks. The values and practices of an organization are expressed in its culture, which underpins how its management and staff interact and conduct business daily. The growing number of business scandals involving sanctions violations, financial misconduct, bribery, and corruption underscores the need for healthy company culture.

It guarantees that a good AML culture has strong support from the top for both ML/TF risk management and implementing integrated controls to satisfy compliance goals. In addition, developing an AML culture requires AML/CFT controls to align with the organization’s broader risk appetite.

Why is AML Compliance Culture Essential?

Companies must have a strong AML culture because failures in AML/CFT have frequently been too weak AML cultures. An organization with a strong AML Compliance culture can identify compliance issues early, reduce risks, and offer practical compliance solutions.

Compliance teams are more successful at detecting and managing risks. In addition, the company is more effective at carrying out AML/CFT initiatives, where AML/CFT efforts are integrated, and there is a strong understanding throughout the enterprise.

The following is said by several regulators who seek to underline the significance of a favorable AML culture:

The Advisory to Financial Companies/Institutions on Promoting an AML Culture, published by FinCEN, emphasizes the importance of an organization’s culture to compliance.
Financial crime is unacceptable, AML resources are insufficient, and top management has little awareness, according to Financial Conduct Authority (FCA) reviews conducted in the UK.
According to AUSTRAC in Australia, compliance mechanisms alone are insufficient to produce good outcomes without a strong compliance culture. Still, the presence of a compliance culture can lower regulatory risk.

A review of major sanctions and enforcement proceedings for AML legislation violations in the US and the UK revealed recurring problems with senior management oversight and compliance culture. This has occasionally caused regulators to worry that some organizations have purposeful blindness to or disdain regulators.

You Can Create A Strong AML and Regulatory Compliance Culture

Some aspects must be prioritized to establish a good compliance culture within a company.

These elements can be summed up as follows:

1. Re-examination of Corporate Governance

The company’s corporate governance will need to be reviewed and improved as a priority. The overall vision and strategy of the companies should be clearly defined. Clear emphasis should be placed on the organization’s mission, target audience, line of business, location, and management style. Everyone involved in the industry should consider regulatory compliance crucial and keep it in their minds. A Code of Conduct and several other pertinent policies should clearly describe and reflect these desirable standards of conduct and general behavior. A well-written and current code of conduct can outline expectations for proper conduct and give management and staff members of an organization a direction.

The boundaries for all significant choices and activities are established by policies, which offer a framework for an organization’s operations. Strong regulatory compliance regulations are necessary, and one such regulation should be the Customer Acceptance Policy.

2. Organizational Structure

Accountability is ensured, and senior management is assisted in delivering the proper messages to all employees to ensure adherence to core values and principles via a robust, transparent organizational structure. The structure should be as straightforward as feasible to provide clear roles, duties, lines of accountability, and alignment of interests throughout the business. It must be open and offer simple monitoring procedures. Additionally, it should establish clear lines of reporting, clarify the allocation of duties among the various members of the organization, and specify the procedures for making decisions.

3. Identifying and Understanding Risk

When identifying risks, evaluating risks, and putting measures in place to reduce those risks, a concerted and risk-based strategy should be used with a focus on higher-risk areas. However, low-risk zones are also crucial, although they come in second.

It is impossible to comprehend the appropriate actions to deal with these risks effectively and efficiently if the stakes are not identified. Therefore, organizations should identify hazards, evaluate the possibility and impact of breaking laws and regulations, rank those risks, and develop the appropriate tools and processes. Businesses must also determine the proper personnel to combat these risks.

When establishing an AML culture, it is crucial to choose the best AML officer who will develop and administer the program, make any required adjustments, and keep key staff members and the board updated on its development. Additionally, they must have appropriate internal controls, impartial review mechanisms, and regular testing of policies and systems.

4. Training

A good AML program and culture of compliance depend on practical training for personnel, management, and AML officers. The employees of a company must comprehend their regulatory compliance responsibilities and the justification for asking them to act ethically. Staff members shouldn’t be inflexible or mechanical in their daily judgment calls or decision-making processes. Instead, they should know what to do when confronted with potential ML or improper behavior, value reason, and document their judgments.

Bottom Line

Developing an AML Compliance Culture starts with adopting newer modes of AML and KYC. For this, you will need a reliable fintech resources provider. At Signzy, we provide state-of-the-art quality API products that are AI-driven without needing a single line of code.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Lowering The Lending Daze With APIs- A Detailed Look With Top 4 Benefits Of Open API Infrastructure

Posted on August 25, 2022 | by Signzian

Nearly all organizations now depend on Application Programming Interface (API) technology, and the lending industry is no exception. API technology is a software platform that enables two programs to communicate with one another.

Forbes reports that 85% of companies view web APIs and API-based integration as essential to their corporate strategy and long-term success. Lenders may offer better products, more advantageous loan conditions, and a more effective, seamless customer experience by connecting to third-party data suppliers and aggregators via an open API infrastructure. Intelligent lenders are utilizing this new wave of innovation focused on shared services, allowing them to maintain their emphasis on their core loan goods while using the most recent technological advancements.

However, many firms can feel lost in the jungle and struggle to comprehend how to approach an open API strategy. This does not have to be the situation. You can find success by using the advice and techniques in this blog post.

Why Does Lending Need APIs?

In response to market realities, lenders must act swiftly to present enticing offers to borrowers. Being connected to a network of integrators and providers of third-party data is the finest and most effective way to do this. Simply said, lenders will fall behind if they don’t link to a larger digital ecosystem. Additionally, forward-thinking lenders are learning more about APIs and how they could change the way they provide credit.

Consider the fantastic experiences you have in your life, thanks to app-based platforms. Have you ever used Facebook to log into a service or application, for example? This illustration shows the simplicity of service your loan business can offer its clients by utilizing an open API infrastructure.

The Benefits Of An Open API Infrastructure In Lending

Lenders can change how they provide digital goods and services to all stakeholders, including customers, partners, and staff, by exposing their businesses to APIs and shedding the constraints of their traditional systems.They can essentially transform lending. Among the main advantages are:

Accelerated innovation and increased scale- Avoid being overtaken by the competition by having access to reliable partners and data sources that can hasten the release of new goods and services.

Boost revenue- by targeting new consumer categories across a more comprehensive geographic range without adding costs or affecting profitability.

Integrating credit report and bureau data- into your core lending platform can eliminate manual data entry, reduce margins of error, and enhance laser-focused underwriting. This is by removing the need for paperwork and numerous layers of human approval, which adds time to the underwriting process.

Integration of background data and applications- is made more effortless. Data synchronization to and from your back-end systems can be more straightforward if you use standard API services to scale enterprise connectivity and follow best security practices.

However, each lender is distinct and presents borrowers with a different selling proposition. Knowing what functions best for your company is crucial. There isn’t a single universal API strategy. Understand your goals and how to collaborate with the appropriate data suppliers and other third parties to achieve what’s best for you.

Top Tips For Making Your API Strategy A Success

Organizations must take a logical, proven approach to the journey to build API products and participate in the API economy. Steps to take include:

Developing your digital strategy- Lack of a compelling digital design could spell doom in an environment of intense competition and virtually daily introduction of new technology. Understanding what you want to achieve with digital technology is crucial and ensuring that it ties in with larger business goals.

Align and unite across business units and culture – Ensure everyone is on board and aware of the advantages and how they relate to the company’s goals. You need the entire executive team to back your API strategy; this is not simply the CIO’s or the IT department’s job. There will be a paradigm shift with this for many organizations.

Engage a comprehensive digital ecosystem: Senior executives are responsible for expanding the company’s consumer base and enhancing internal procedures. However, they are unable to accomplish this by carrying on as usual. Businesses may identify and seize these opportunities by connecting to external data sources. By putting together (either buying or building) a complete lifecycle API management platform/tools and establishing an API architecture, try to build and nurture your API community. Be sure to implement security best practices.

The Bottomline

Technology, in all its essence, is transforming the lending ecosystem. APIs are the current phase of this. You need to adapt to this amalgamating technology to keep your enterprise in the race. It is impossible to do this alone, so you need a good resource provider.

You can enhance your venture’s processes with Signzy’s resources, including verification and collection APIs designed explicitly for lending and loaning industries. Our products are AI-driven yet do not require any coding. We can find apt solutions for your issues with a fully customizable quiver of options. Check it out here.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Online KYC To Prevent Data Breach- 4 Things To Understand Its Relevance In Cybersecurity

Posted on August 18, 2022 | by Signzian

According to IBM, the typical cyberattack costs $3.86 million, and it takes 280 days to discover and contain. Additionally, the market for basic cybersecurity worldwide will be worth $403 billion by 2027, growing at a 12.5% compound yearly growth rate. For the longest time, KYC in all forms (including Online KYC) and basic cybersecurity have operated as independent fields. Protecting businesses against external threats like antivirus software, firewalls, etc., has been referred to as cybersecurity. However, the KYC process has been incorporated into the company’s client onboarding procedure to guarantee that the new user is qualified after passing the security tests.

Another effect of the coronavirus outbreak is the fusion of Online KYC and basic cybersecurity. Online businesses proliferated when lockdowns confined individuals inside of their homes. But regrettably, it also puts daily life subject to cyber attacks. Since the pandemic breakout, 71% of IT and security experts worldwide have noticed increased security risks and attacks.

Here are 4 things to understand about the use of Online KYC in basic cybersecurity.

1. What Exactly Is The KYC Process?

In the global economy, financial institutions are more exposed to criminal activity than ever before. Know Your Customer (KYC) guidelines have been developed to safeguard financial institutions from fraud, corruption, money laundering, and financing of terrorism.

KYC is used in the following:

Determining the identity of the customer
Recognizing the kind of activities that customers engage in
Make sure the money is coming from a reliable source.
Evaluating the danger of money laundering

Business owners have traditionally valued KYC Processing. It used to be required for regulated companies, but since technology has evolved and the bulk of services are now provided online, it has become increasingly important for every company. It serves as the customer’s first point of identification because it includes biometric data like fingerprint, IRIS, and face. They make sure to verify uniqueness before offering any services as a result.

2. KYC and Basic Cybersecurity?

Businesses reported fraud-based losses resulting from account opening and account takeover in 57% of cases. It indicates that cyber dangers are gaining access to KYC procedures and that further security measures are necessary. Businesses currently provide safe Online KYC solutions for increased cybersecurity.

Facial liveness solutions that employ artificial intelligence and machine learning technology to provide a failsafe verification process are assisting in preventing fraud. Today, the same can be done with a selfie or fast video chat, contrary to earlier perceptions that it was impossible to do facial liveness checks without physical verification. As a result, social media networks can use such technologies to stop cybersecurity frauds.

3. Online KYC’s Role In Ensuring Seamless Identity Checks

Companies and enterprises can choose to integrate ML algorithms and Online KYC APIs easily. They are simple to integrate into any organization’s primary business applications. It makes it possible for verified consumers to be onboarded and for the customer experience to be smooth. In addition, document validation uses AI and ML technology.

Technologies like document verification and optical character recognition (OCR) extraction are also emerging. They provide the businesses the authority to collect altered photographs. Similar to how OCR software identifies, extracts, and assembles letters into words and phrases from an image. Additionally, it is advantageous against data breaches.

4. What Can Governments Do?

Governments can actively assist businesses by assisting with consumer identity checks. Unique IDs, like the Aadhaar cards used in India, are one such method. Governments’ readiness to give necessary APIs to the private sector, where possible, can ensure that KYC processing is completed in addition to setting up Unique IDs. Additionally, it will help to eradicate cybersecurity fraud and data breaches.

Conclusion

Nowadays, Online KYC can be completed quickly and affordably thanks to contemporary technology, which also improves cybersecurity. At the moment, Online KYC and basic cybersecurity coexist in the same world. Companies are now asking pertinent questions about cybersecurity due to the post-pandemic shift in the security paradigm. They want to integrate seamless and secure operations to maintain their customers, data, and reputation. Never let your guard down as a corporation, and keep an eye out for technological solutions that guarantee cybersecurity during the Online KYC processes.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Top 10 Must Have API Qualities For Business Growth

Posted on August 17, 2022 | by Signzian

According to MarketsandMarkets, the API management sector is projected to be worth $5.1 billion by 2023, at a CAGR of 32.9%. The lion’s share of this comes from the investment and financial technology sectors. Although the number of transactions might be relatively low, the amounts transferred are rather high here. That’s where API is revolutionizing the ecosystem.

APIs have long been hailed as the foundation for revolutionizing financial technology in the investment sector. However, not all APIs are made equal, despite their ability to alter how investment data is maintained and moved within the fund sector. Some qualities are essential when looking at an API-first solution for investment management:

1) Security In The Investment Sector

Any modern API will include strong validation, encrypted transmission, and robust authentication (at a bare minimum). In addition, the sensitive customer data that is virtually always stored by investment platforms (such as names, addresses, portfolio holdings, and national insurance numbers) needs to be protected. Errors are unacceptable when it comes to safeguarding your clients’ data.

2) Low Entry Barrier

New API users ought to have a low entrance barrier. We discover that a standard like OpenAPI (also known as Swagger) gives developers a comfortable experience. Shortening deployment times will also be assisted by accessing Software Development Kits (SDKs). A solid SDK will handle the most mundane activities, allowing users to tackle their business growth problems immediately (e.g., building a new asset allocation algorithm or integrating with a new custodian).

3) Apt Documentation

Any API you use should be thoroughly documented and include numerous examples. Both the technical elements of the API and use-cases should be covered in the documentation. For instance, “How do I execute a valuation with a custom price source?” or “What are the minimal field names and data types required to update a trade?”

4) Logical Building Blocks With Synergy

You would want logical and practical abstractions and resources represented via API endpoints. For instance, a different Instruments and Holdings endpoint will be available on practically all investment management platforms. These endpoints ought to operate in unison (we call this composability). For example, you should be able to take the details of the instruments from the Holdings response and use these to call for more information about the instruments from the Instruments endpoint.

5) Adopt Premium Standards

A high-quality API should adhere to internationally accepted standards. The onboarding process for new users is improved when familiar standards are used (and applications). An illustration of this is the REST architectural style, which uses the HTTP standard verbs (GET, POST, etc.). As a result, developers don’t need to carefully read the system documentation to realize that a “PUT holdings” request replaces (rather than changes) all of the holdings in your portfolio. Industry standards can also aid in processing API data by applications and machinery. For instance, we prefer JSON because it is supported by rich libraries in all essential programming languages.

6) Consistent And Persistent Implementation

A top-notch API should apply naming conventions and standard features uniformly across all endpoints. For instance, a Holdings endpoint and a Transactions endpoint might need to deliver a reference to an exclusive instrument in an attribute. To provide the best user experience, that attribute should have the same name (perhaps something like InstrumentId) in both endpoints. Standard features across all APIs should also be consistent. For example, do your APIs have any filtering functionality? If so, the operators and syntax used in those filtering statements across all endpoints should be the same.

After determining the mandatory features in an API-first platform, let’s now look at some of how an API-first solution can give you improved access to your investment data.

7) External Systems Integration

By offering a “common language” for these systems to communicate, an API-first platform should enable smooth integration between various systems in your financial technology stack. For instance, an Order Management System (OMS) and a Portfolio Management System will often have a continuous data flow between investment managers (PMS). Therefore, it is possible to guarantee that both systems are constantly updated with accurate data by using an API-first platform as the foundational integration layer. To ensure that your portfolio managers are constantly making decisions based on the best information, for instance, you might want orders raised from the PMS to reach the OMS promptly and for the PMS to be updated with transactions from the OMS in real-time.

8) Data Access Control

Granular entitlements that are simple to administer will be present on an excellent API-first platform, giving administrators complete control over the data that particular users and groups are permitted to access. With everyone having simple access to the information they require but no one having access to data they shouldn’t, you will be able to achieve the ideal data entitlement.

9) Rapid Data Onboarding

For a client, do you need to onboard a new ESG data set? Or have your data strategists found any further information that could be mined for alpha? Your teams will be able to quickly extract the most value possible from new data if you have a reliable pipeline that pumps it into your ecosystem and has an intuitive API with a flexible data model. This is the evolution in financial technology we seek for business growth.

10) Transparency For End-Users In The Development Process

API suppliers can easily involve customers in the development process thanks to the microservice model of API-first platforms, where loosely connected services are delivered and maintained individually. In addition, users can test new functionality early and take part in the feedback loop during early revisions of an API endpoint thanks to the separation of endpoints into “Production,” “Beta,” and “Experimental.”

Why Choosing An API Provider is Crucial

As the sector deals primarily with large amounts of money, there is no space for even the slightest errors. Mostly these errors are human-made. Thus one of the prerequisites you can have while transforming your processes is to automate the processes with a reliable decision engine. This should be done without compromising the investor’s experience or their safety.

With Signzy’s No-code AI-driven decision engine integrated API that’s fully customizable, you will get the apt resources you seek. In addition, we have a dedicated collection of Investment APIs that includes investor onboarding features, verification processes, and much more. Check it out here.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Cross-Country Payments With RBI’s UPI- A Detailed Look At The Central Bank’s Future For International Remittance

Posted on August 11, 2022 | by Signzian

India was the top recipient of remittances in the world in 2021, receiving over USD 87 billion. This represented a 4.6% increase above its remittance inflows from prior years. This is because remittances only represented 3.1% of the nation’s GDP in 2020.

Cross-country remittances are growing, and the Reserve Bank Of India(RBI) acknowledges this as they are deciding to act on it. Their initial plan is to add newer options to the 6-year-old Universal Payments Interface(UPI) that includes international payments. Prima facie is undoubtedly a step in the right direction. Yet we must look closely to see how it will impact the sector.

What Is RBI’s Initiative?

The Reserve Bank of India (RBI) stated in its annual report for FY21 that it is working on using UPI for cross-country transfers among jurisdictions.

RBI has looked into the idea of connecting UPI with comparable systems in other jurisdictions, particularly in the G20 countries, to improve cross-country and international payment arrangements. In addition, the apex bank claims to participate in the discussions over the fundamentals and roadmap of UPI and cross-country remittance with the Committee on Payments & Market Infrastructures (CPMI) and Financial Stability Board (FSB).

What Are Cross-Country Remittances?

For the uninitiated, cross-country remittances are transactions between individuals, companies, or banks in at least two countries. At the moment, cross-country and international payments are settled through a bank with branches in both nations. The bank converts money to local currency and charges users a commission of up to 10%. As a result, the procedure is time- and money-consuming.

What Is The Future Of Cross-Country Remittances In India?

The cornerstone of the cross-country payments ecosystem in India is likely to be laid by a similar agreement between PayNow, based in Singapore, and UPI’s governing organization, the National Payments Corporation of India (NPCI). The integration of UPI with PayNow has been formally announced, even though the efforts with different nations are at varying levels. According to the RBI, it should start operating in the second half of 2022.

The interlinking lowers the cost of cross-country remittances and will further anchor commerce, travel, and remittance flows between the two nations. It might also be used as an illustration of how different fast payment systems can be linked to sending money quickly and cheaply.

Essentially,

NPCI, an RBI initiative, has collaborated with several foreign organizations to share the UPI infrastructure but prevents cross-country payments.
The cross-country payments ecosystem in India is likely to be built around PayNow, a Singapore-based company, which is the sole partner of UPI.
According to the RBI, efforts are in various phases with different countries, but cross-country remittance via PayNow will start after July 2022.

UPI For Cross-Country Remittances

One of India’s payment settlement infrastructures with the quickest growth is UPI. The interface enables peer-to-peer payments across banks and platforms with a single pin. UPI recorded transactions of INR 10.4 Lakh Cr. in May 2022 alone because of its scalability and simplicity of usage.

As a result, numerous nations took note of the stack and made plans to implement the UPI functioning model in their countries. For this, NPCI’s international division, NIPL, has agreements with several banks in nations like the UAE, the US, Nepal, China, Japan, and several regions of Africa. However, so far, these partnerships have been signed to share the infrastructure and not enable cross-country payments.

For instance, in August 2021, NIPL announced its partnership with UAE-based Mashreq Bank to benefit 2 Mn+ Indians who travel to UAE for business or leisure every year.

In July 2021, NPCI partnered with the Royal Monetary Authority (RMA) of Bhutan to initiate UPI-based payments in Bhutan and benefit an estimated 200,000 tourists from India who travel to the mountain nation annually.

Other successful international partnerships in this space include Discover Financial Services (DFS) USA, Japan Credit Bureau (JCB) Japan, Union Pay International (UPI) China, PPRO Financial, UK, and Network for Electronic Transfers (NETS), Singapore, and Liquid Group, Singapore.

Bottomline

Once RBI implements this aspect of UPI, transactions will boom, and fintech enterprises need to be ready. A simple digital adaptation to accommodate the transforming technology won’t cut it. All processes will have to qualify for international standards, and better security measures must be implemented. All this needs to be done without compromising the experience of the customer.

If you seek to improve your processes and be ready for the looming change, we at Signzy might be able to help out. Our No-code AI-driven resources that are fully customizable are built for your needs. Check it out here.

About Signzy

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

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