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THE PARTNERSHIP ECOSYSTEM: FINTECH’S SECRET WEAPON?

Many of fintech’s success stories are built upon businesses that would have traditionally been competitors coming together as collaborators to fix a specific problem, which has benefitted the industry and consumers alike. In today’s fast-paced environment, a ‘do-it-alone’ strategy does not always cut it.

Historically a key trend that has underpinned the growth of the industry has been traditional organizations such as big banks and government agencies partnering with tech-driven newcomers. Encouraging regulations and policy changes like Open Banking have helped the sector harness an ever-expanding range of technological possibilities.

Collaboration has not just been limited to fintech partnering with large incumbents, however. Growing numbers of fintech are partnering with one another to drive innovation and provide customers with an ecosystem of partners that know how to work and integrate together, while most importantly, meeting customers’ needs. This trend should be encouraged as it delivers multiple benefits including allowing businesses to harness smart thinking from across the fintech industry while avoiding the clashes of perspective and culture they might encounter with more traditional organizations. This isn’t just limited to the financial services sector either, with companies such as food delivery applications or mobility solutions partnering with fintech via embedded finance solutions to offer their customers a winning product.

Two, three, or perhaps no heads at all?

Fintechs who want to partner with players from the same industry need to make sure the partnership is aligned with their needs. While the rewards of partnerships are high, strategic collaboration requires thoughtful consideration. Depending on the product, the size of the business, or the expected outcome of their venture, there are three principal options that they should consider.

They can decide to not partner at all and build the entire product or proposition themselves. While you’ll be able to design exactly what you want, this can take a long time and a lot of money to develop and implement. Then there’s the ongoing resource required to maintain, develop and remain compliant.

Fintechs can also decide to outsource some of their needs to a single partner. This is something scaling fintech often does to plug gaps in existing capabilities, improve user experience, and increase their go-to-market time by relying on one, often more-established generalist with a ‘broad brush’ approach.

Alternatively, fintech could partner with multiple, best-in-class specialists, leveraging their varied skills to fuel growth. For example, a company could partner with one provider for cross-border payment solutions, another for card issuing, and a separate one for compliance.

From competition to collaboration

Whichever approach fintech decides to pursue, in our experience there are benefits to bringing together different expertise, technology, and purpose. Here collaboration trumps competition, and as opposed to the wider world of commerce where businesses often fall victim to fierce competition, fintech is achieving success by working towards common goals.

Further, many of the most successful fintech are fast-moving, agile, and able to rapidly respond to change and the ecosystem’s disruptive characteristics. This flexible approach means many are pragmatic and access the pool’s diverse capabilities to meet a specific challenge when it arises.

Fintechs are also often distinct from traditional financial institutions in that their culture is inherently different. They can choose best practices and styles to create something new and compelling, which gives them an ‘open-mindedness’ towards partners and an appreciation that diverse perspectives yield positive results. Problems are easier to solve when they are looked at from multiple angles.

A good example of an effective fintech partnership is the recent collaboration between global payments platform Currencycloud, Transact Payments Limited (TPL) – principal Scheme member for Visa & Mastercard and BIN sponsor, and financial infrastructure platform Integrated Finance (IF) to deliver a unique solution for sync., the all-in-one money aggregation app. In this case sync. had a vision of creating a super app that would allow users to instantly access, manage, and view all their accounts across different banks within a single app.

Integrated Finance provided sync. with the ability to open customer accounts and move funds between multiple banks and institutions by automating its workflows and enabling sync. to connect easily to other institutions. Transact Payments Limited enabled them to issue their card via a new settlement system which allowed them to hold multiple currencies and offer them to customers. Currencycloud, meanwhile, allowed sync. to offer their customers different currencies within the app and the ability to access a global market and remain compliant. This collective know-how provided the framework for sync. to build a truly unique application and get to market in less than three months.

Alliances like these are synonymous with innovation and improved offerings for customers. For fintech, the right choice might not always be to align themselves with legacy banks and consultancies first but to instead look to their counterparts. In an industry that offers novel solutions to customers, a partnership model can generate the energy that fuels growth, innovation, and creativity.

thefintech.info

8 SIMPLE HACKS TO MAKE ACCOUNTING LESS TEDIOUS

Accounting is the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. It is the measurement, processing, and communication of financial and non-financial data of economic entities. The task is tiresome since it requires a great deal of hard work and concentration on the part of the person concerned. So, we came up with a few hacks to help make accounting less tedious and more enjoyable.

  • Understanding Accrual Vs. Cash Accounting

There is a significant difference between the Accrual and Cash basis of accounting. All the expenses that are incurred in a year, including those expenses whose payment has not been done yet or for which payment has been made in advance in the earlier year(s), should be included in that year’s profit & loss statement. Similarly, it is essential to book income in the year in which the goods or services are provided whether or not the consideration is received for the same or in case the consideration was received in advance. This helps to recognize correct revenue earned and expenses incurred during a particular financial year.

  • Regular Tracking of Bank Statements

If an accountant allotted 20 minutes weekly to download their business’ bank and credit card statements and plot the nature of all the transactions against each entry, the process will become more organized and easier to access. The result of this hack will astonish you;  This process requires only 20 minutes a week and will save you a lot of time. This is a very straightforward way to maintain accounts.

  • Tracking Incomes Received in Advance

It is essential to understand that the money received in advance for goods or services yet to be provided/rendered is not considered income. For example: If your business model is to receive money upfront and provide services over a period of time (say over a period of three months), then the advance received would be booked as income proportionately over the period of three months. It is better to maintain a database that could help track the date on which the money is received today and the period over which it needs to be recognized as income. This helps to have organized documentation that gives a glimpse into the actual revenue and liabilities of the company and the remaining period over which the services are to be rendered.

  • Tracking Prepaid and Postpaid Expenses

In a business, just like incomes are received in advance, in some cases, there could also be expenses whose payment is made upfront for a certain period, for example, consider website subscriptions. Also, there are some expenses that are paid for at a later date on completion of a specific assignment, This can lead to confusion regarding the actual expenses of the company for the particular financial year. To streamline the accounting of such expenses, it is best to maintain a well-organized record of all such expenses to know the period over which they need to be recognized. The money paid in advance for services yet to be received is not to be booked as an expense but recognized as an asset. It will be booked in the profit & loss account only when the expense becomes due.

  • Maintaining Appropriate Documentation

In today’s complicated world, one of the most common mistakes people make is failing to recognize the importance of a document and then regretting it afterward. So, it is of utmost importance that no matter how insignificant a document seems, if it is related to your business, you must adequately and safely retain it. It could be required in the future for a variety of purposes, including balancing your accounts, determining tax responsibilities, and even claiming tax deductions.

  •  Pre-Incorporation Expenses

Keeping track of every expense made related to the business is vital. Even money spent on setting up a business forms a crucial part of the profit/loss of the business, and therefore, it is entitled to a tax deduction. The tax deduction is subject to relevant laws, but overall, for tax purposes, it is essential to track all expenses incurred while setting up a business.

  • Accounting and Bookkeeping Software

Accounting and Bookkeeping are often maligned because of the data entry involved. However, today’s cloud-based accounting software takes most of the tedious tasks out of accounting. The choice of accounting software varies depending on the size and nature of the business and the industry you are engaged in.

  •  Seeking Professional Assistance

If accounting still seems like a difficult task or feels impeding and confusing, the best option is to hire a professional accountant. A professional accountant possesses expertise in the field of accounting and bookkeeping and manages the accounts of a particular company. This helps you focus on other critical aspects of running and expanding the business/profession without getting into the nitty-gritty of everyday accounting.

thefintech.info

FIVE NEW FINANCIAL JOBS OF THE FUTURE

Money and possessions are evolving in an increasingly digital and virtual world, and financial jobs will also change to keep up. Here’s a look at some new roles those in the industry see emerging.

In-House Bank Hacker

Usually, bank security guards keep the bad guys out. How about security guards hired to break in? Large financial institutions have long hired companies to hack into their systems and report back on weaknesses, a process called penetration testing, A big change that saw in recent years is that financial institutions are employing in-house penetration testers to continuously test their systems. People have figured out you can’t just do a test once a year. When you’re continuously writing code and you’re continuously deploying new infrastructure, you have to have a continuous penetration-testing process, It’s always been difficult to find talent.  Now, these jobs are even more in demand. Do we need more hackers?

NFT Appraiser

As our lives increasingly migrate to digital and virtual worlds, we’ll begin to acquire assets in those worlds,  At the same time, he foresees the “financialization of everything,” in which anything with intellectual-property value can become a unique digital asset that can be owned–music, games, even sneakers. Last year, collectors spent billions of dollars trading digital art and collectibles, most of which were attached to NFTs, or nonfungible tokens, which act as vouchers of authenticity on the blockchain for virtual goods. So how do assess the value of these virtual assets? Call in the NFT appraiser. Financial institutions will need to hire people from a broad range of industry sectors to help them understand how to properly evaluate digital collectibles.

Loan Officer as Financial Adviser

Technology developments and regulatory shifts could cut the time it takes to buy and sell a home from a couple of months to a couple of days, Relieved of that, the loan officer of the future could pursue higher-value parts of the job: acting as an adviser and counselor. They’ll have more time to help customers strategize, look for opportunities and prepare financially for their long-term goals. This already exists to a point, but it’s not nearly as widespread as it could be. Whenever technology makes things more efficient, it allows people to spend their time doing what they do best.

Chief Fintech Officer

What happens when the financial-services part of an online business takes on a life of its own? You may need a chief fintech officer. Housecall Pro, created as a platform to help plumbers, electricians, landscapers, and other home-services providers run their businesses, is one example of a development that is happening more often, It was started to help tradespeople do things like making appointments, creating estimates, send invoices and take payments. Today, the financial end is a huge part of the company’s business. As demand for financial services grew, It offers clients a suite of products to handle their financial needs, including payments, bank transfers, customer financing, payroll, and more. More companies built around a core product unrelated to finance will need people in roles responsible for providing financial services to customers.

Financial-Bot Supervisor

People are going to need a new kind of financial adviser if they want someone to help them manage their virtual portfolios of NFTs and other assets. This new financial-management role will best be filled by a bot, humans won’t be completely out of the picture, Humans will be needed to look over the bots’ shoulders to ensure that the recommendations they make are sound. A financial-bot supervisor, in other words. You will need somebody who would sit on top of everything, who would make sure that whatever those bots are proposing as an outcome to the consumers is always within the scope of the regulations.

thefintech.info

3 FINANCE TIPS FOR NEW ENTREPRENEURS

Carving out your niche in the business world isn’t for the faint of heart. But after months and even years of planning, you’ve started to earn income as a new business owner. As an entrepreneur, you get the best of flexibility and earning potential plus some major financial responsibilities.

Understanding your unique financial opportunity is essential if you’ve recently struck out on your own or begun a side hustle. When you know the financial advantages, opportunities, and risks of your new endeavor, they can work in your favor.

  • Take Advantage of Entrepreneur-Friendly Tax Rules

Paying taxes is one of life’s necessities and a task that’s less desirable than most. However, entrepreneurs often have tax advantages when it comes to deductions, write-offs, and savings. Before you start setting cash aside for quarterly tax payments, dig into the options available to you.

Even if your business endeavors are in addition to your primary job, you can save for retirement past usual limits. A newer option, the Solo 401(k), gives self-employed individuals the ability to save up to $57,000 annually. This is more than double the allowable amount for traditional 401(k) plans, making retirement saving an achievable goal. Use your savings efforts to reduce or defer your tax obligation while your contributions grow over time.

Self-employed individuals can also write off various expenses associated with operating their business. If you use a space in your home solely for your business, you may be able to reduce your tax obligation. Supplies, repairs, and technology needed for your operation are all worthwhile expenses to track and include in your business expenses. Review the latest Internal Revenue Service rules for what’s allowed when it’s time to file.

  • Prepare for Variable Income

Budgeting is essential for any professional, but business owners have to prepare for more variation than the average person. Contract-based work, billable hours limits, and the ability to choose your projects to give you both flexibility and risk. At times, your workload will be overwhelming, while in other seasons, it may be scarce. Do what you can now to prepare for the highs and lows of entrepreneurship.

Aim to project your annual earnings based on the client relationships and contracts you have in place. Identify which contracts or agreements are on a rolling basis or have fixed time frames to determine how reliable they are. For each contract, track renewal specifications, identify opportunities to rebid work, or note whether the relationship is finite. If renewal is a possibility, engage with the individuals responsible for renewing your contract well in advance of a decision. Ideally, you’ll be able to identify new opportunities and client needs to help you lock in upcoming work.

Once you’ve got a good read on your income potential, determine how much of your income to save or spend. Based on your earnings, set aside some for estimated taxes, which many sole proprietors pay in quarterly installments. Plan for variable income by being conservative with how much of your remaining income you use for personal expenses. Update your budget to account for slower months by reducing costs, enrolling in budget billing, or paying premiums in installments.

  • Protect Your Health and Assets with Insurance

New business owners often take on the responsibility of expenses or choices traditionally made by a corporate employer. If you’re on your own, you’ll need to consider how you’ll access critical health and personal protection insurance. Even if you’re relatively healthy, health coverage is an essential need to address. A single hospital visit can lead to financial ruin, so view your premiums as an investment in your future.

Health insurance options can be reviewed at HealthCare.gov, and you can choose from state-specific coverage that meets your needs. If you’re married, you may also be eligible to enroll in your spouse’s employer-sponsored plan. Utilize health savings accounts if possible to save money for health-related expenses over time.

In addition, review life insurance, short and long-term disability insurance, and additional dwelling coverage needed for your home office. As a sole proprietor, your income depends on you, so if you’re sick or injured, disability insurance can support your income. If others rely on you for income or for repayment of the debt, life insurance is non-negotiable. Right-sized homeowners insurance can protect your investment in equipment, inventory, and supplies, which often exceed traditional residential coverage.

Cultivate Your Career on Your Own Terms

As an entrepreneur, you make the rules. That can be refreshing, especially after working in the corporate world. As you lend your expertise to others, realize the opportunity you have to create a career that supports your aspirations.

Develop your own mission and vision for your sole proprietorship, much as a larger organization does. You may not share this vision with others, but it’s an exercise to help you focus on your overall goal. Flexibility, financial freedom, and more time spent doing the things you love are all top contenders here.

Once you’ve developed your career vision, use it to guide how you take on work and engage with clients. With this vision in mind — and a stable financial footing to support it — you’ll soon be cultivating the career of your dreams.

thefintech.info

INSURANCE NOW DEMANDS CUSTOMER CENTRICITY: HOW CAN FINTECH HELP?

The acceleration in digital transformation and digital adoption across all industries has raised customer expectations over the last few years. The way customers want to pay for or access services has changed for good, so insurers, just like all those in financial services, have to meet those expectations to stay competitive.

Consumers were already getting used to a smarter, more personalized service thanks to the rise in technology, but the pandemic, with its need for arm’s length interactions, fast-tracked the need for service providers to offer that service.

It’s apparent that greater adoption of fintech and innovation in the insurance industry is needed, both to keep up with changing customer expectations and ensure that the customer always remains the first priority.

How does the insurance sector measure up?

There are plenty of industries where embracing and benefitting from fintech is the norm, but arguably insurance is not yet one of them, having lagged behind its counterparts when it comes to embracing new technologies and adapting to changing customer needs. This includes the way in which we can now buy most products and interact with service providers so quickly and seamlessly online.

The stereotypical view of insurance may well be that of a traditional, paper-heavy industry that’s not known to keep pace with technology, but that doesn’t have to be the case. Figures from PWC demonstrate that almost half of the industry globally claims to have fintech as an integral part of corporate strategy. However, only 28% of industry players look at partnering with fintech organizations, and only around 14% actually participate in fintech ventures or incubator programs.

But with many insurers beginning to introduce online platforms offering a “buy now” option for their products, it is clear that a shift is beginning to take place. Insurance brokers need technology to maintain their competitive edge, and if they don’t embrace fintech to better meet customer needs, they will lose out to those that do. Moreover, the rise of challenger banks has also put increasing pressure on traditional institutions in the financial services sector, who now need to strategize how they can compete and retain their market share.

Using FinTech to meet customer needs

The goal of insurers is to broaden the pool of people that have access to protection, and fintech is the only way to achieve that in today’s digital world. The way the industry sells insurance should be the result of how the customer wants to access these products, not the other way around.

Some customers are looking for advice to make sure they get the best product, and there is tech out there that can ensure they get directed to this channel, should it be best for them. Other customers just want a simple out-of-the-box policy that they can buy quickly and easily, with at least some elements of self-service.

Technology can help, giving customers, access to a tailored comparison of life insurance products based on their answers to a single set of underwriting questions, and then offering an efficient and straightforward “buy now” capability.

Giving customers the choice that best suits them offers the flexibility that consumers need and gives insurers a real opportunity to increase revenue and even diversify further still.

And that’s just the start. Creating an omnichannel approach using fintech is key to responding to changing customer needs and ensuring these needs are put first. Digital technology makes life easier for consumers, and they often have their own preferred method of dealing with service providers. Access to a basic website is no longer enough, people expect live online help, mobile apps, and more. Moreover, the adoption of fintech at the policy level can enable insurers to use app technology to collect data (for example, vehicle or health insurance).

What’s next for fintech and the insurance industry?

The most successful insurers will be those that offer the fastest, most efficient customer journey all the way from the initial quote to full cover. If customers are able to choose and buy their insurance online, they don’t want it to take upwards of 60 clicks to get to the final, fully underwritten decision.

Insurers will need to offer a full omnichannel approach to meet customer demand for a connected experience across multiple channels. Consumers are used to being able to choose their preferred method, or methods, of interaction with retailers and service providers. They’re also used to being able to switch channels and continue the conversation or process seamlessly, without having to start again from the beginning.

There is still a long way to go, but there’s no doubt that the role of fintech in the insurance sector will continue to grow. Fostering a truly omnichannel approach to the way consumers buy insurance provides a vital way forward for the industry, and, ultimately, it will ensure more people are better protected.

thefintech.info

10 BEST FAST-GROWING FINTECH STARTUPS IN THE WORLD IN 2022

Leading FinTech startups are gaining popularity in the global financial sector with AI apps

Artificial intelligence and other cutting-edge technologies are helping industries to embrace digital transformation efficiently. Similarly, the financial sector is adopting financial apps and other FinTech services through modern technologies. FinTech startups are ready to thrive in the financial sector with a wide range of products and services to make the banking system easier for customers. FinTech startups are transforming the conventional financial sector with multiple financial apps that can make a transaction within a very short period of time.

Best ten FinTech startups that are fast-growing in the world

Shiksha Finance

Shiksha Finance is an RBI-licensed non-bank finance company (NBFC) that has made a significant impact in the education sector by providing loans for asset creation and working capital to schools and educational institutions to establish high-quality educational infrastructure, as well as loans for school fees to lower-income parents to lower school drop-out rates. School vendors may also be granted loans in exchange for the delivery of goods and/or services to schools. They operate across the education sector, with a particular focus on the bottom of the pyramid’s cheap education (and schooling) segment.

Shopkeep

ShopKeep by Lightspeed empowers tens of thousands of small companies to sell in-store and online, accept payments, and manage their day-to-day operations. Businesses use ShopKeep by Lightspeed to manage their inventory and workers, create an eCommerce shop, send invoices, get real-time sales statistics, and more – all from a single, user-friendly platform. ShopKeep by Lightspeed is based in New York City, with offices in Portland (OR), Chicago (IL), and Belfast (NIR).

SoFi

SoFi aims to help its customers reach their financial goals. It is a finance company that offers a wide range of lending and wealth management services. The company primarily caters to aspiring professionals and offers variable and fixed-rate percentages for personal, study loans, mortgage refinancing, and more. They develop modern financial products to help people borrow, save, invest, and protect their money better so that they achieve financial independence.

Spring Labs

Spring Labs created the Spring Protocol. It is a network designed to allow network participants, such as financial institutions, to share information, such as credit and identity data, without needing to share any underlying information. The company allows organizations to share information among themselves to verify their identities and reduce fraud by securing all the information. Spring protocol focuses on ‘thin file’ or ‘credit invisible’ consumers by creating incentives to provide data and create value.

Starling Bank

Starling Bank is an award-winning, fully-licensed, and regulated bank that is created to provide customers with fairer, smarter, and, more humane alternatives to the banks of the past. The company offers different types of accounts like joint, teen, business, euro, dollar, personal, and child cards. Starling also provides B2B banking facilities and payment services through its banking-as-a-service model based on the proprietary technology platform created by the bank. Its world-class tech has reimagined banking for the future.

Stripe

Stripe is a technology company that is focused on building economic infrastructure for the internet. Businesses of every size, starting from new startups to public companies, use the company’s software to accept online payments and run complex global operations. Stripe combines economic infrastructure with a set of applications for modern business models like crowdfunding and marketplaces, fraud prevention, analytics, and more. The company navigates for global regulatory uncertainty and partners closely with internet leaders like Apple, Google, and Twitter, to name a few.

Suplari

Suplari is an innovative startup, led by veteran entrepreneurs focused on leveraging machine learning to help enterprises change the way they manage their suppliers and costs. The company has developed the first-ever Spend Intelligence Cloud that enables finance, procurement, and business leaders to continuously and collaboratively optimize sourcing, forecasting, risk, and compliance. Suplari aggregates data from disconnected internal systems including contracts, invoices, and other relevant data into a common data store.

Tag

TAG Innovation is the first digital bank in Pakistan. It provides digital wallets and payment services to its customers. TAG provides its users with a personal IBAN account number to receive funds from anyone around the world, without any charges attached. It also provides an easy money transfer feature that allows the transfer of money from any bank or digital wallet in Pakistan. Their systems are encrypted with the highest levels of security so that the personal information and transaction details of the customers are not jeopardized.

Tala

Tala is a fintech company that aims to build financial systems that can work and help everyone. Tala has disbursed about US$1 Billion to more than 4 million customers across East Africa, Mexico, the Philippines, and India. Most of the businesses in these regions have expanded the businesses to pay school fees and bills for building more stable financial lives. The company is powered by data science and machine learning that builds modern credit infrastructure from scratch.

Tandem

Tandem is building a good green bank. Tandem Bank operates as an internet bank, accompanied by a web app. It is challenging the traditional banking legacy by building an app and other products with input from its community of users. Tandem’s goal is to make money simple and help the users save and relax from financial stress. Its open banking feature ensures easier management than traditional bank transfers and is more secure than card payments.

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