digital economy - FinTecBuzz

International Payments: Bridging the Gap in a Borderless World

Martynas Bieliauskas — Wed, 11 Sep 2024 12:30:07 +0000

As any West Berliner over the age of 40 can attest, you don’t need a coastline to feel like you’re living on an island. Yet, while the Iron Curtain is becoming a distant memory even in the minds of those it once divided, European businesses today face a similar barrier that makes it practically impossible to trade or engage beyond their borders.
This isn’t a physical wall: it is the failure of the established banking industry to provide fast, reliable, and affordable international payments.

Cross-border transactions have always been time-consuming and expensive, but in the pre-internet days, this never mattered much to most businesses. Today, however, any business of any size can potentially be a multinational – especially digital businesses, which typically look to the Web (and so, the world) for their customers, rather than just their local High Street. Yet while the internet has made commerce borderless, the banking industry hasn’t kept pace by supporting seamless international payments for all, strangling the global growth ambitions of digital-first businesses.

While most domestic transactions are seamless and straightforward, especially following the Open Banking revolution, all but the biggest enterprises face significant challenges in doing business beyond their borders. They must contend with slow, cumbersome, and costly international payments; indeed, for many digital businesses, the fees and charges can outweigh the value of the transactions they are trying to complete. Traditional banking systems are meanwhile plagued by delays, high fees, and unreliable processes. Transactions can take days or even weeks, and the associated costs can be prohibitive for SMEs that do not have the financial capacity to absorb such expenses.

This is bad news for everyone. The exclusion of agile, innovative businesses from international commerce undermines overall market competitiveness, reinforcing the dominance of large corporations and limiting consumer options. So why, given that technology has transformed so many other aspects of international business, have international payments failed to evolve?

Barriers to Efficient International Payments

The challenges of cross-border transactions go beyond simple data transfers. Effective international operations require specialised processes, including risk assessments, Know Your Customer (KYC), and Know Your Business (KYB) protocols. Banks must also navigate complex legal landscapes in various jurisdictions and establish relationships with correspondent banks and national regulators.

Traditional banks possess the capabilities to address these needs but often choose not to invest in the necessary infrastructure. From a purely financial perspective, supporting the unique requirements of digital businesses, particularly those with international ambitions, may not seem profitable. Establishing the requisite systems, hiring experienced and expert personnel, and forming global partnerships demand substantial resources at a time when banks are already struggling to replace legacy systems. It may not be a priority for them now, but the emergence of fintechs specialising in cross-border payments is a warning shot across their bows.

Legacy-free challengers

While traditional banks may be hesitant to adapt, fintech is stepping into the breach. This new breed of financial service provider offers fast, reliable, and affordable international payments tailored to the needs of digital businesses. Free from the constraints of legacy systems, harnessing the latest technologies and – most importantly of all – investing in the required relationships and skills, these fintechs are designed to meet the demands of today’s global digital economy.
Traditional banks might view these fintech solutions as serving niche markets, but this perspective could change as digital businesses continue to grow. The COVID-19 pandemic, for instance, prompted companies of all sizes to re-evaluate their supply chains and explore new international markets, highlighting the need for efficient cross-border payment systems.

Banks can continue to promote their (domestic) open banking achievements, but without providing truly global services, their claims will increasingly fall flat. If the growing community of digital businesses question why their financial partners cannot support their international needs, adjusting their ad campaigns and marketing messages will be among the least of their worries.

The question facing the traditional banking industry is how long they can afford to maintain their parochial, inward-looking focus. When ambitious digital businesses feel like they’re living on an island, it’s only natural that they will start looking for a bridge to the rest of the world.

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Martynas Bieliauskas, CEO, Klarpay AG

Martynas Bieliauskas is a fintech entrepreneur, investor and a well-versed technology and operations specialist with emphasis on emerging technologies and trends.

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Cwallet and Microcosm Labs to Drive Crypto Adoption and Innovation

PRNewswire — Tue, 30 Apr 2024 14:00:25 +0000

To accelerate mainstream crypto and blockchain technology adoption, leading crypto wallet provider Cwallet announced a wide-ranging strategic partnership with Microcosm Labs, a pioneering blockchain applications platform.

The collaboration will see deep integration between Cwallet’s secure crypto storage solutions and Microcosm Labs’s cutting-edge blockchain applications and services. The two companies combine their strengths to remove critical barriers to crypto adoption and unleash new waves of innovation across the digital economy.

“Crypto has incredible potential to transform how we interact with money and digital assets,” said Frank Ling, CEO of Cwallet. However, that potential is limited by complexities around security, usability, and real-world use cases. Our partnership with Microcosm Labs directly tackles those challenges head-on.

As part of the agreement, Microcosm Labs may invest strategically in Cwallet to align long-term interests and roadmaps. Microcosm Labs has also invested in and incubated several products focused on the TON ecosystem, including GameFi, DeFi, and others. The specific portfolio that can be checked includes TonUP, PixelSwap, TonTogether, DetectiveTON, etc.

The investment will help Cwallet expand its top-notch wallet infrastructure, making it easier and safer for more people to store and use crypto. Additionally, integrating with Microcosm Labs’s blockchain ecosystem will create new crypto use cases in decentralized finance, NFTs, gaming, and beyond.

Moreover, Cwallet is broadening its platform by integrating more tokens on the TON chain, demonstrating its crucial role in enhancing user experience and promoting TON token usage. This reflects Cwallet’s dedication to broadening its blockchain services. Through a strategic partnership with Microcosm Labs on their launchpad, Cwallet aims to extend the functionality of its Telegram Bot, which will be employed by platforms like Pixelswap for promotions, enhancing the reach and effectiveness of its tools for new projects.

Such strategic efforts are central to promoting widespread crypto wallet adoption and advancing blockchain technology. These efforts position Cwallet and Microcosm Labs as critical players in the future of the blockchain industry, thus providing significant value to users and investors.

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Chapter 1: How Neo-banks Are Defining the Future of Banking

FTB News Desk — Mon, 22 Jan 2024 13:00:07 +0000

Table of Contents
Introduction
1. Unveiling the Strategies of Neo-Banks
1.1. Seamless Operation
1.2. Better Data-driven Insight
1.3. Strict Regulatory Framework
2. Traditional Banks Vs. Neobanks: Who Has the Advantage?
3. What Will Impact the Future of Neobanks?
3.1. Competition Redefined
3.2. Advancement in technology
3.3. Empowered Consumers
Wrapping Up

Introduction
The banking sector has undergone several changes and advances in recent years, particularly with a growing emphasis on the digital economy and individuals’ shifting purchasing patterns.

Today, most transactions are completed online, and the need to visit a bank location for routine financial activities is nearly eliminated. Thus, neobanks are establishing themselves as game changers, propelled by rising demand for financial services in unconventional settings and technological advancements.

Let’s consider an example: Neobanks provide services, like opening bank accounts for immigrants, by facilitating technological advancements like biometrics, fingerprints, and facial recognition during onboarding procedures and not based on traditional documentation for identification. These digital banks also lower administrative expenses, offer consumers fewer fees, and propose better interest rates than traditional banks.

1. Unveiling the Strategies of Neo-Banks
Neobanks have emerged as a blend of technology and financial innovation and are fast transforming the financial services industry.

Let’s break it down.

1.1. Seamless Operation
Neobanks emphasizes simplifying the banking experience for its customers by creating user-friendly technology as a cornerstone. For instance, by providing seamless and automated services like real-time notification, personalized budgeting, and expense tracking software, managing customer accounts, and helping them make transactions through personal devices, Neobanks optimizes its operations.

1.2. Better Data-driven Insight
Apart from seamless operations, the most intriguing strategy that neo-banks apply is a data-driven approach that attracts new generations of customers. Neobanks bridges the gap between customers’ needs and wants by providing personalized solutions and offering value-added services by real-time monitoring their transactions and search history on Neobank’s website or application.

1.3. Strict Regulatory Framework
Although neobanks are not directly regulated by the government, they have to adhere to financial standards and practices with their partner banks. Especially during the onboarding of customers, neobanks have to closely monitor and provide sufficient documentation to meet their banking partner’s due diligence requirements.

2. Traditional Banks Vs. Neobanks: Who Has the Advantage?
The main comparison between traditional and neobanks is the services they offer. Traditional banks provide in-person services and digital services through mobile banking. On the other hand, neobanks are completely digital, meaning they offer services entirely online.

Traditional banks frequently suffer from obsolete procedures and outdated technology and are trying hard to close the gap and catch up with more agile competitors. Whereas, neobanks accelerate their popularity by providing a hassle-free digital banking experience to tech-savvy consumers and reaching every nook and cranny of the world.

In the struggle against traditional banks, neobanks attempt to take over segments of the financial industry where traditional banks failed or did not pay sufficient attention.

According to a global research framework, the main target groups of neo-banking are:

Small and medium-sized organizations (SMEs) have traditionally undergone limited access to financing. However, neobanks’ SME-centric services attracted interest by providing inexpensive loans to small businesses with a more straightforward and rapid lending process than traditional banks.

Neobanks are making specific efforts to improve financial knowledge and engagement. Being targeted at the younger generation, neobanks upload a lot of videos, useful materials, and personalized services to increase the efficiency of their platforms’ use.

On the contrary, traditional banking is more popular among older generations as it offers an in-person channel, which helps build a strong relationship between the bank and the customer, which generates trust and confidence in monetary transactions.

The table below shows the difference between traditional banking and neo-banking:

3. What Will Impact the Future of Neobanks?
The entire BFSI sector has undergone a more rapid transition in the past few years, and this trend is expected to continue in the future. With neo-banking, the BFSI industry has moved a step further.

The future of neo-banking is bright, as growing trends such as AI use, the development of digital banking services, the inclusion of cryptocurrencies and blockchain, and tailored digital experiences continue to transform the sector.

Here are some future predictions on how neobanks are fundamentally altering the financial industry.

3.1. Competition Redefined
With more use of the internet and smartphones, the trend toward neobanks is expected to rise among younger generations as they will find digital banking services more flexible and agile. Furthermore, it is expected that Neobanks will be well-positioned to expand their services to the unbanked and underbanked populations (MENA and Africa region) in the future. With the increasing popularity of neobanks, traditional banks might take the initiative to digitally transform to compete with neobanks.

3.2. Advancement in technology
For seamless operation and efficiency, neobanks might witness significant change by implementing sophisticated and modern technologies. Neobanks will continue automating their operations and reduce their dependence on manual processes, which will contribute to lowering the cost. It will also employ artificial intelligence (AI) for various tasks, like fraud detection, customer onboarding, checking due diligence, and many more. There are signs that neobanks will adopt blockchain technology to provide a more secure and efficient banking experience for their customers.

3.3. Empowered Consumers
It is expected that the neo-banking platform will provide more data-driven budgeting and finance management tools and software through which customers will get real-time updates, track their spending, and set saving goals. These features will empower consumers to make informed decisions, improve their financial well-being, and achieve their financial goals effectively. Furthermore, neobanking would prioritize delivering exceptional customer service by seeking feedback, taking a customer-centric approach, and ensuring continuous improvement in their websites and mobile applications.

Wrapping Up
Just as neobanks reshaped the banking industry with their customer-centric strategy, finance industry leaders will be defined by a thorough awareness of changing consumer expectations throughout the coming decade.

A new generation of digitally native banking customers wants innovative and secure financial services that are personalized to them, and they have a variety of options if they do not receive them.

In 2024, Neobanks’ objective will be to continue delivering innovative goods and services to keep one step ahead of their conventional competitors, capturing as many consumers and market share as possible.

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Noda Chooses ThetaRay AI Solution to Monitor Open Banking Services

BusinessWire — Tue, 14 Mar 2023 13:30:06 +0000

Noda, an open banking fintech, and ThetaRay, a leading provider of AI-powered transaction monitoring technology, today announced they will collaborate to enhance payment monitoring and compliance capabilities on Noda’s growing platform that is supporting the new digital economy in Europe.

Headquartered in the UK, Noda is helping online merchants in Europe receive direct bank payments from eCustomers via a secure and instant one-stop open banking payment solution, as an alternative to cards, providing direct integration with banks in most European countries.

Through the agreement, Noda will implement ThetaRay’s sophisticated AI-powered SaaS SONAR solution for AML that detects known and unknown financial crime threats and the earliest indications of schemes. The system will enable Noda to stay up to date with the complex and constantly evolving regulatory landscape, as well as manage the compliance challenges involved with monitoring transactions in the Single Euro Payments Area (SEPA) across multiple channels and jurisdictions.

“With ThetaRay’s advanced transaction monitoring system and our expertise in payment services and compliance, we are poised to take our business to the next level and provide even more value to our customers,” said Lasma Gavarane, Chief Compliance Officer/MLRO at Noda. “Together, we will be able to detect and prevent financial crimes, comply with evolving regulatory requirements, and therefore enhance the overall security and reliability of our fast and convenient payment services to customers.”

While SEPA simplifies bank transfers of euro to member countries, financial institutions handling transactions don’t have full visibility into the profiles and activities of customers. By providing deep, AI-generated insights, the ThetaRay system can identify anomalous behavior indicating financial crime.

“Noda is an innovation leader in the European payments market as it transforms into a more competitive and more efficient network that is enabling the digital economy. The adoption of sophisticated AI technology to fight financial crime brings the trust to a payments ecosystem that serves as a fintech growth engine,” said Mark Gazit, CEO of ThetaRay. “We are looking forward to a successful partnership with Noda to develop and grow European fintech.”

Fintechs in Europe represent a total valuation of almost €430 billion, more than the combined market capitalization of Europe’s seven largest listed banks according to a recent report.¹

ThetaRay’s award-winning SONAR solution is based on a proprietary form of AI, artificial intelligence intuition, that replaces human bias, giving the system the power to recognize anomalies and find unknowns outside of normal behavior, including completely new typologies. It enables fintechs and banks to implement a risk-based approach to effectively identify truly suspicious activity and create a full picture of customer identities, including across complex, cross-border transaction paths. This allows the rapid discovery of both known and unknown money laundering threats, and up to 99 percent reduction in false positives compared to rules-based solutions.

(1) McKinsey, Europe’s Fintech Opportunity Report, October, 2022.

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Klarpay AG Expands Payment Offering With 13 New Currency Accounts

PRNewswire — Mon, 06 Feb 2023 14:00:20 +0000

Following the successful addition of USD and GBP accounts in 2022, Klarpay AG extends its commitment to empowering digital businesses through borderless, scalable, bespoke business accounts by enabling 13 new currency IBAN accounts.

Klarpay AG marks a significant expansion of its international payment offering with the launch of 13 new currency IBAN accounts. This addition enables digital companies, including online merchants, ad networks, marketplaces, and influencers, to collect and disburse payments in AED, AUD, CAD, DKK, HKD, HUF, JPY, MXN, NOK, PLN, SEK, TRY, and ZAR globally via their corporate Klarpay account in addition to the 80+ payout currencies which are already available.

With the introduction of these new currency accounts, Klarpay’s customers will now be able to conduct business more efficiently in multiple countries and currencies, thereby expanding their reach and opening up new opportunities for growth. Klarpay’s international accounts are ideal for companies looking to expand globally through cross-border transactions. The addition of these new currency accounts furthers the company’s commitment to providing its merchant clients with the tools they need to succeed in today’s digital economy.

“We are excited to offer our customers even more options for conducting cross-border transactions,” said Martynas Bieliauskas, CEO of Klarpay. “Our goal is to empower businesses of all sizes to reach new markets and customers, and these new currency accounts are an important step in achieving that goal.”

Klarpay’s all-in-one dashboard and API make it easy for digital businesses to manage their cross-border transactions effectively, while the company’s predictable, secure, and cost-effective cross-border payment and FX capabilities ensure that online businesses can focus on growing their operations without having to worry about the logistics of international payments.

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Crypto Asset Rating Launches Reg. S Security Token

PRNewswire — Thu, 19 Aug 2021 15:30:05 +0000

Crypto Asset Rating, Inc. (CAR INC), a US-based Fintech company, announced today its launch of a digital security token using the company’s Tokenization Asset Platform.

The security token is backed by Class B Common Stock and is exempt from registration under Regulation S of the Securities Act of 1933 where only non-US investors can invest in the offering.

The funds raised during the token sale will be used mainly for product development, marketing, and infrastructure management.

The company is expected to offer three bonus offering models to its investors, each with different phases of exciting extra bonuses for early investors. Read our Private Placement Memorandum for more details.

“We expect tokenized securities to increasingly become more mainstream as more of our clients start to embrace tokenize securities as part of their capital fundraising exercise which we believe will bring change to the digital economy”, said Pramod Attarde, Chief Executive Officer of Crypto Asset Rating, Inc.

The Token offering details are:

*Type of Token*	–	Regulation S for non-US investors
Token Properties	–	Backed by Class B of Common Stock
		The token is available only to non-US investors
Accepted Currencies	–	Bitcoin (BTC), Ethereum (ETH), USD
*Token Standard*	–	ERC1400 Standard
*Decimals*	–	8
*Token Issuance*	–	After closing of the offering

*Token Name*	–	RATING
*Token Symbol*	–	*RATING*

The company has already achieved enormous success with the launch of its advanced rating platform, Crypto Business World Media Platform. CAR INC recently launched a job platform focused on the Fintech industry that allows prospective candidates to connect with their desired employers.

Today, CAR INC is one of the prominent leaders in the crypto market. With innovative and pioneering products like Crypto Asset Rating Platform (CARP) and Tokenization Asset Platform (TAP), Crypto Asset Rating has set the perfect example for reinventing the financial system.

The company’s Tokenization Asset Platform (TAP) is a Software as a Service (SaaS) that offers the process of creating, issuing, managing, and converting an asset to digital securities. TAP does this by leveraging tokenization technology to fractionalize ownership of equities, bonds, shares, and commercial/residential real estate. Issuers and private investors have early liquidity options through the issuance and tradability of asset-backed digital securities using the Tokenization Asset Platform.

CAR INC is offering investors an equal opportunity to invest in a well renowned Fintech company and reap the benefits. By investing in the company, investor have the power to shape their financial future and help make a significant mark in the digital economy.

To become part of the history and to invest in a revolutionary Fintech startup transforming global capital markets, visit https://invest.cryptoassetrating.com

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Huobi Announces the First International Blockchain Forum

Chandrima S. — Mon, 02 Dec 2019 16:30:59 +0000

Huobi Group, a leading global blockchain company announced the ‘Hainan Free Trade Port International Cooperation Forum on Digital Economy and Blockchain,’ the state-sanctioned event

In partnership with the Department of Industry and Information of Hainan Province and the Hainan Resort Software Community, Huobi Group today announced the ‘Hainan Free Trade Port International Cooperation Forum on Digital Economy and Blockchain,’ a global gathering of top government officials being held on December 5th and 6th at the Ritz Carlton and Renaissance Hotel in Haikou, Hainan Province, China.

As a state-sanctioned event supported by the government of China, the forum will bring together local and foreign officials and business leaders from countries along the Belt and Road to promote blockchain technology and drive international cooperation in the emerging digital economy. Over a dozen countries will be represented at the forum, including Russia, Thailand, Gibraltar, Malaysia, Nigeria, Argentina, among others.

Belt and Road Initiative of China is a global development strategy aimed at fostering economic collaboration across Asia, Europe, the Middle East, Africa, and the Americas. As part of the initiative, Hainan Province will host the international blockchain forum as the first blockchain pilot zone in China.

Shen Shaoming, Governor of Hainan Province, and Cai Esheng, Vice Chairman of the China Banking Regulatory Commission, will give the opening speech on the first day of the forum. A ministerial roundtable of delegates from the Belt and Road countries will take place shortly after, followed by keynotes delivered by Huobi founder and CEO Leon Li and Hainan officials. During the forum, high-level Chinese officials, Huobi executives, and foreign dignitaries will share new insights on the development of the blockchain industry and the digital economy both in China and globally.

Hu Tao, Head of the Hainan Ecological Software Park, said “There will be panels and discussions running the gamut of topics in the entire blockchain industry, from emerging opportunities of the digital economy to the risks of blockchain technology. However, the highlight of the event will be the signing ceremony between Chinese blockchain enterprises and representatives from the Belt and Road nations.”

As a founding organizer of the forum and one of the most influential blockchain companies around the world, Huobi will use the high-profile gathering to share more information about its blockchain ecosystem and its global initiatives. Huobi will also unveil the ‘Global Digital Financial Thinktank’ with a formal ceremony at the forum.

CEO of Huobi China, Yuan Yuming stated, “The forum is an opportunity to demonstrate to business and government leader’s opportunities for collaboration using our cutting-edge technology and infrastructure.”

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