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Financial services industry

The Impact of Brexit on the Financial Services Industry

What is Brexit?

Brexit is a shorthand term derived from ‘Britain’ and ‘exit’ used to refer to Britain’s split from the European Union. In 2016, a referendum vote (for everyone of voting age) was held to decide whether the UK should remain in the EU or leave. A good majority out of the 30 million people who voted favored that the UK should leave the EU. One of the common economic arguments often put forward for Brexit is that EU membership is hampering U.K.’s trade ties outside the trading bloc.

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Brexit: what are the main challenges for financial services industry?

After four decades of continuous membership, the United Kingdom is all set to make a great exit from the EU in 2019. This will be the most complex demerger ever contemplated, having severe impacts. It includes the potential disruption to the lives of millions of European nationals living outside their home country, the disruption to complex supply chains in sectors such as automobiles and aviation, and the disruption on capital flows and the financial services industry. In this blog, our experts in the financial services industry have analyzed the impact of Brexit on the sector and what needs to be done next:

Passporting

Presently, a company in the financial services industry that is licensed in one EU member state can in principle conduct business throughout other countries in the EU by passporting their license across national borders. Chances are that the UK decides to stay in the European Economic Area (EEA). EEA provides its members with access to the EU Single Market. It is subject to European law and jurisprudence in respect of the ‘four freedoms’, which include the free movement of goods, services, people, and capital. Members are also required to pay a financial contribution to the EU. In this case, companies in the financial services industry may continue the passporting of their licenses. However, the scenarios where UK seeks temporary EEA membership for a smooth exit from the EU should not be completely ruled out.

Mutual recognition

For much of the early negotiation phase of Brexit, the British government preferred to establish a mutual recognition system. This was an agreement between parties to maintain comparable rules to accept each other’s findings as binding in their own city. For companies in this financial services industry, this would require the establishment of a bilateral body that jointly agrees to objectives including financial stability, consumer protection, and dispute management. Although each party would have different procedures to achieve the agreed objective, the ultimate goal would be ensuring consistency of outcomes.

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Equivalence

In theory, equivalence offers an easier method of facilitating cross-border business. The EU examines the regulatory and supervisory framework that exists in a given country for a given business activity and determines whether the rules in the said third country are equivalent to those in the EU. In case they are, the companies in the financial services industry from the said country are permitted to conduct cross-border business. Given that the UK and EU are at a point of perfect regulatory convergence provides a means by which firms established in the country could continue to operate cross-border, post-Brexit. Equivalence is likely to be the foundation of UK’s financial services agreement, with the UK seeking a declaration that the city of London is fully equivalent to the European Union by reference to a common legal and regulatory framework. This translates to the fact that a deep understanding of both the functioning and limitations of this framework is a prerequisite for post-Brexit regulatory management.

Relocation

Another option available to companies in the financial services industry who are conducting cross-border activities is relocation. Firms in the financial services industry that have their headquarters in London could consider opening a licensed EU headquarters in an EU-27 member state. If the backbone of the future UK-EU agreement is equivalence, then those activities for which equivalence is not permitted would be subject to relocation, possibly with legacy book transfer.

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IR24

3 Key Financial Services Industry Trends That are Expected to Bring Significant Changes in 2019

The financial services industry is, undoubtedly, evolving rapidly all around the globe. But whether you think about regulations, shifts in technology, or global events, the changes can be dizzying. From the smallest community institutions to the largest multinational firms, it’s time to rework on plans for everyone because what has led to success until now may not work as well in the future. With the Brexit deadline fast approaching, the financial services industry is expected to face mounting risks from potential asset-price bubbles. Moreover, for both small and large financial firms, it is time to focus on scenario planning as 2019 can be a volatile year. Today, with the rapidly changing technologies and financial services industry trends, companies must be adept at becoming agile and boost visibility in the marketplace. In this article, we have talked about some of the major financial industry trends that companies must follow to stay vigilant and make the most of opportunities that arise in 2019.

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product research

How Banking Companies Can Keep Themselves Unscathed from Cyber Attacks

Cyberattacks are becoming more frequent than ever before. Despite increasing emphasis given to cybersecurity in banking companies, this sector is one of the most sought-after targets for cybercriminals. Robbing a bank is one of the oldest crimes in the book. However, bank robbers in the modern day are hiding behind the screen, using targeted and sophisticated cybercrime tactics and leaving IT teams struggling to keep their networks and their vaults secure. According to the Verizon Data Breach Investigations Report (DBIR) 2016, the financial sector had the largest number of security breach incidents, with 795 confirmed data losses. In fact, the U.S. Securities and Exchange Commission (SEC) has stated that cybersecurity in banking the biggest risk facing the financial system.

When it comes to cybersecurity in banking, it is always beneficial to be proactive rather than reactive. Though cyberattacks cannot be fully prevented, planning how to respond to a breach and regularly testing this plan through realistic simulations will helps organizations reduce the severity of such malpractices. In this blog, the experts of cybersecurity in banking and financial sector from Infiniti Research have put forward some of the key ways in which companies in this sector can secure themselves amidst the cyber-attack chaos.

Ways to ensure cybersecurity in banking 

Though the IT teams in banking companies have increased protection of customer data and brought down the number of credit card fraud, this does not completely establish cybersecurity in banking. The internal systems of most banks still need securing. Here are some ways in which the teams for IT and cybersecurity in banking can improve their network security to better secure the vault:Get More Info

Be proactive

Banking sector companies must respond as if their network already has been breached rather than waiting for it to happen. Adopting this mindset forces the IT teams to prioritize the most business-critical parts of the network and use network segmentation as a strategy. If done in the desired manner, network segmentation, achieved through the creation of network zones, limits the ability for a hacker to move laterally across a compromised network.  Cybersecurity in banking through network segmentation requires continual updates and configurations.

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Enterprise-wide security policy

Having a well-defined security policy is a crucial roadmap towards cybersecurity in banking. This helps the IT team maintain a truly adaptive security architecture and determine the best way for the network to operate with minimal risk. Furthermore, it must be noted that the security policy takes into consideration all the regulatory and enterprise compliance requirements and how to apply timely patches to maintain compliance.

Security policy enforcement

As important as it is to have a security policy to ensure cybersecurity in banking, it is also imperative to validate that it is being enforced across your network. Not doing so will make the network vulnerable to threats. Organizations in the banking sector must constantly monitor their network for changes to configurations and ensure that these changes are approved and compliant with policy. This is a collaborative effort across the enterprise—network operations, security operations, and the CIO. 


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Competitor analysis

Market Share Analysis For a Leading Fintech Company Helps Boost Their Market Growth and Increase Profit Margin

Infrastructural and regulatory issues are posing as some of the biggest challenges in the growth of the fintech companies. Click To Tweet

In the wake of global digitization, banking sectors are resorting to their in-house technological innovation to cater to customer’s quest for digital transactions. This has led to dwindling dependence on the fintech companies; thereby, curtailing their marketing scopes. On the other hand, the fintech companies are forced to allocate more investments and resources to augment their product portfolio. However, the actual product performance in the market fails to compensate for this product innovation investment subsequently resulting in severe market share loss for these companies. Moreover, fintech companies are relatively new in the market and do not have in-depth information on the regulators and governing bodies they should pledge their adherence to. Request ProposalThis lack of information leads to the delay in obtaining a license and increases the possibility of these companies being slapped with hefty fines.

Business Issues

  • The client: One of the leading player in the fintech companies market

The client- one of the reputed fintech companies approached Infiniti to conduct a market share analysis to gain meaningful insights into their current market position in the global fintech industry space. Additionally, they wanted to gain insights into their growth rate, profitability, cost structure, and distribution channels across the industry. The market share analysis engagement was also expected to help target customer base and consequently lead to optimal investment return and a maximized EBITDA margin.


How Can Market Share Analysis Help Fintech Companies?

Infiniti’s market share analysis solution helps fintech companies to stay abreast of the critical market scenario and keeps them informed about their current market position. These factors are imperative for an undisruptive growth of the fintech companies. The market share analysis also helps companies explore the brand reputation and accordingly make adjustments to the brand needs. In addition to this, a robust market share analysis solution highlights the performance benchmarks to evaluate the brand goal progress in the future.


Summary of Our Fintech Company Market Share Analysis

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Client Journey

Infiniti Research undertook comprehensive primary and secondary research methods while conducting the market share analysis. The research involved interviews and discussions with stakeholders in the fintech industry space. Infiniti’s market share analysis experts also analyzed the inputs gathered from a vast array of resources such as company presentations, industry forums, and paid industry databases. This offered the client a comprehensive overview of the latest fintech industry trends.

Solution Benefits and Business Impact

This market share analysis engagement from Infiniti helped the client gain real-time insights into their market position that also highlighted the advantages and disadvantages that they possess when compared to their peers in the fintech industry space. The solution also helped the client understand customer interests and accordingly target their consumer Get More Infobase. The client was also able to design a progressive and predictive market strategy which helped them gain an edge in the competitive fintech companies market.


Fintech Companies Future

The emergence and thriving of the fintech companies is an inevitable phenomenon in the age of digitalization. A phenomenon which is gradually becoming the podium of all financial transactions. As convenience and accuracy are some of the benefits offered by fintech companies, customers are now more inclined toward fintech based transactions. Additionally, major financial institutions are forming partnerships with the fintech companies to augment their operational efficiency and respond to customer demands. Furthermore, it can be safely said that the fintech companies will grow in tandem with the advancement of technologies.


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Blockchain Technology Making its Mark in the Insurance Industry: Four Reasons Why This is Great News

The use of blockchain in insurance is still in its early stages of inception and implementation. The potential of blockchain technology in sharing data, process claims, and preventing fraud in the insurance industry is indeed intriguing. But companies in this sector still have a long way to go in terms of actively working with start-ups, regulators, and industry experts to figure out the best ways to navigate the potential challenges of the blockchain technology to the realities of the insurance industry. With that in place, it is undeniable thaGet More Infot the applications of blockchain in insurance will revamp the way this industry functions. Let us dive deeper into blockchain technology and the perks of blockchain in insurance.

What is blockchain technology? 

Blockchain technology has moved on from a mere buzzword to one of the notable tech trends in most industries. It is a distributed, peer-to-peer ledger of records called blocks that is virtually incorruptible.  Every block is linked using cryptography. It is self-managed and does not require coordination from an intermediary. Not just financial transactions, but blockchains can be programmed to record virtually everything of value.

Blockchain in insurance 

Not only does blockchain offer the promise of cost reduction and efficiency, but it could also enable revenue growth, as insurers attract new business through higher-quality service. Industry experts at Infiniti Research have curated some of the key benefits of employing blockchain in insurance:cta ir

Improved rate of trust 

Industries like insurance and financial services run majorly on the trust between customers and the company. Customers trust these institutions with their earnings only because of the trust that a particular institution has instilled within them. But in many cases, banks and insurance companies do not reveal the exact data to their customers, building skepticism in their minds regarding any further investments. Implementing blockchain in insurance and other financial institutions helps build consumer trust as it provides transparency in transactions.

Timely fraud detection and prevention

Blockchain technology has immense potential to detect and prevent fraudulent activity, making the use of blockchain in insurance extremely compelling. Over the past several years, the insurance industry has been battling with fraudsters and hackers who have duped them of millions of dollars. Blockchain technology will help insurance companies to easily verify customers, policies, and transactions for authenticity using a decentralized repository and its historical records.

Smart contracts and better claims processing

Blockchain technology can solve several issues that both the insurer and the insured currently face. Insurance contracts are often seen as long and confusing for insured individuals, while insurance companiesAsk An Analyst_IR are working hard to protect themselves against all possible types of fraud. With the help of smart contracts and blockchain technology, both insurers and the insured would benefit from managing claims in a responsive and transparent way.

Enhanced efficiencies

It is a known fact that in the case of changing insurance companies, the data entry process to get coverage and care started is extremely slow and inefficient. Customers also often find themselves in the fear of losing their personal data to fraudsters. Blockchain provides a solution to drive security and efficiency that facilitates personal data to be controlled by an individual while the verification is registered on the blockchain.


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IR36

Top 4 Types of Digital Currency and Their Impact on the Financial Industry

Currently, there is a very limited base of users who prefer digital currency. The framework for its regulation and the tax structure to regulate digital currency is still evolving. It has two categories, namely cryptocurrencies and virtual currencies. Digital currency facilitates direct payments between payees and payors and removes intermediaries, infrastructure costs, and processing costs. It also facilitates the easy and transparent flow of funds. But before moving ahead, let’s understand what is digital currency in simple terms.Get More Info

What is Digital Currency? 

A payment method which exists only in the electronic form is called digital currency. Digital money has many benefits associated with it, such as easy and timely payments and lesser transaction costs. It can also help companies in the financial industry to eliminate the risk of exposure since they are highly secure.  But the acceptance of this currency by the financial industry is limited due to risk factors such as volatility of currency, identification of payment beneficiary, regulatory compliance, and transaction risks. Here is the list of the top four digital currency that will have a positive impact on the financial industry. Ask An Analyst_IR

Digital Currency List 

#1 Bitcoin

Bitcoin was launched in the year 2010 and since then it has gained huge popularity as a cryptocurrency. Although bitcoin is becoming popular since the time it has been launched, it also has suffered a few drawbacks in the past few years like its shooting transaction costs. 

#2 Ethereum (ETH)

Launched in 2015, Ethereum has got its strength from its development team. It works on the blockchain technology and has pooled a crowd of renowned institutions, investors, and also some of the well-known corporations like Toyota, BP, Intel, and Microsoft. 

#3 Monero

Monero, launched in the year 2014, was initially called as BitMonero. It is mainly aimed at privacy, security, and untraceability. The cryptonote protocol provides anonymity to the users at each transaction and this feature makes it different from Bitcoin.Request Proposal

#4 Dash (DASH)

Created in the year 2012, Dash focuses on anonymity with the aid of PrivateSend, which utilizes a selected quorum of random masternodes on the network. It has a unique InstantSend feature which helps the transactions to get cleared within a few seconds and the charges for these transactions are petty.  All these make Dash one of the strongest payment oriented currencies.

Impact of digital currency on the financial industry 

Increase in efficiency

The use of digital currency will increase the efficiency of the financial industry by making payments easier, faster, and most importantly more secure. The businesses in the financial industry will obviously witness many benefits from the use of this technology.

The effective alternative for unstable economies

Although digital currency has not been adopted widely, its use in countries such as Venezuela where Bitcoin seemed to be more stable than its national currency at the time of high inflation, shows that it can be an effective alternative for hard cash in the future. Contact US

Faster transfer

Distributed ledger technology helps the digital currency to settle transactions in real time; thus, saving the time of transactions. If it is adopted officially by banks, it can be a good competitor for other payment modes, which will ultimately benefit the end user. 

Easy cross-border payments

Digital currency has not been widely accepted yet, but it has definitely made cross-border transactions easier. Added to that, it is expected to reduce the foreign exchange cost substantially in the future.


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IR17

Financial Services Industry Analysis: Trend and Challenges For this Year

The financial services industry plays a pivotal role in the way the world economy functions. It helps in the smooth transition of money from entities with extra funds to those who are in dire need of funds. The financial services industry comprises of companies who specialize in activities such as insurance, lending, investing, and securities trading and issuance. The vast financial services industry also includes professionals who specialize in tax filing, wire transfers, currency exchange, and credit card services. It also encompasses services for debt resolution and well-renown payment providers such as Mastercard and Visa. Firms in the financial services industry specialize in managing money and are world-leaders when it comes to equity market capitalizations and earnings. Their clients range from individuals to non-profit organizations, businesses, and government agencies.Get more info (more…)

Market Entry Strategies

Challenges That Fintech Companies Need to Be Prepared For

The growing importance of innovations coupled with the extensive use of technologies has changed the face of banking worldwide. Financial technologies (Fintech) have become an integral part of banking, and nowadays banks have started to compete beyond financial services due to the increasing competition from nonfinancial institutions. The Fintech industry has grown massively over the past couple of years. Fintech companies pose a strategic threat by potentially disrupting the financial sectors and services, particularly in areas such as lending, payments, wealth management, and property and casualty products. Fintech companies have quickly moved on from their initially modest offerings in back-office operations into areas such as trading, investment, retail banking, thus emerging as direct competitors in the industry. Though the fintech revolution has been in full swing for the last few years, there are a number of complex challenges that fRequest Proposalintech companies are yet to resolve:

  • Regulatory constraints

The fintech industry is quite different from the traditional banking setup. Fintech companies are often unaware of which regulators and governing bodies they have to adhere to. This means that these companies often aren’t even aware of the regulations that they must comply with. This problem can result in delays in getting license on-time. Also, the possibility of getting charged with hefty fines are also high. To add on to this problem, since the financial crisis of 2008, governing bodies have created much more stringent regulations that the financial industry must follow.

  • Difficulty in attracting investors

Fintech companies were highly successful in raising funds until 2016. However, from the second quarter of 2016, this trend showed a major dip. One of the main reasons for this was banks and other financial institutions starting their own fintech operations and reducing the dependence on fintech companies. Traditional banks may have been seeing companies in the fintech industry as rivals. However, banks and other financial institutions aren’t aware of the advantages that the fintech companies can provide for them.

  • Limited understanding

Since the fintech companies do not follow those crystal-clear guidelines that were previously mentioned, there’s obviously a lot of misunderstanding in the exact procedures which must be followed in the fintech industry. Furthermore, the general public has their skepticism about relying on fintech companies rather than traditional banks. The fintech revolution has the potential to disrupt the financial industry, but until more people become educated about fintech, some of the misconceptions will restrict companies in the fintech industry from realizing their full potential.

  • Security challenges

The financial sector deals with sensitive information about various individuals and enterprises. With the emergence of fintech, a plethora of data has become available in digital formats, which makes it easier to analyze and generate insights, but at the same time also makes the data more susceptible to security breaches. This is one of the main factors fueling skeptics to rely on fintech companies.

 


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Business Forecasting

Popular Innovators in The Global Banking Sector

The banking sector around the world is becoming highly competitive. With many players in the industry expanding their services and operations across borders, the battle among banking companies to survive in the market just got harder. In an industry that is as extensive as the banking, innovation goes a long way. Modernization and innovation have become a way of life for many players in the banking sector who seek to set themselves apart from the rest. Here is our pick of the top innovators in banking services:IR_Brochure

Guaranty Trust Bank

Guaranty trust bank, established in 1990, has grown to become Africa’s leading banking services institution over the years. They are among the pioneers of innovation and digitization in Africa’s banking sector. They have rolled out a variety of digital banking products in the recent years, and are committed to providing easy and equal access to the banking sector for all citizens.

DBS Bank

DBS, ranked as one of the world’s most innovative banks, is leaving no stone unturned to incorporate the magic of technology into their banking services. DBS has been experimenting with artificial intelligence, mobile banking, and other digital solutions into their operations to enhance their customer experience. These technologies also promise top-notch data security to the customers.

ANZ Group

ANZ group looks beyond the boundaries of finance to incorporate innovation in their business and also to help individuals and smaller businesses grow. The bank is focused on creating financial products and services that would simplify their customers’ lives.

Pilatus Bank

Pilatus bank is committed to providing solutions to facilitate smooth interaction between the bankers and the clients. They also aim at ensuring the safety of customer data and transactions through cybersecurity solutions. Pilatus bank also provides expert guidance for clients to make informed business decisions.


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IR18

Cyber Security Threats That the Financial Sector Needs to Keep an Eye on

By recognizing the fact that cyber criminals will find a way to exploit vulnerabilities, financial companies can improve the way they deliver their services, manage security risks, and train their employees.

For over half a decade, cyber security issues have been a bane for many industries. But firms operating in the financial sector have been the worst affected due to their inability to keep up with the security requirements of the modern world. Most cyber criminals attack firms operating in the financial sector because that’s where all the money is. However, with banks and other firms quickly learning how to strike a balance between being open and being secure, instances of digital break-ins have reduced significantly. That being said, here are some of the potential cyber security threats that the players in the financial sector should watch out for :IR_Brochure

Third party cyber security risk

Financial sector companies can experience cyber threats from the third parties and the vendors that they work with. Players in the industry must ensure that they have a system to monitor their vendors or other third party providers continuously. Having a continuous monitoring tool will give companies in the financial sector some relief from cyber threats.

Fourth party cyber security risk

Companies in the financial sector do not generally keep a close watch on their fourth parties. When the fourth party is affected by some ransomware attack, there are high chances of the third party, who has the company’s vital information also to be affected.Therefore, it is essential to keep a close watch on fourth party activities also from time to time.

Global business operation risk

For financial sector companies that operate across borders or at an international level, the threat of cybersecurity is greater. So, companies operating at a global scale must be aware of the cyber threats prevalent in the regions that they operate in.

DDOS attacks

Distributed Denial of Service, or DDOS, is the latest buzzword in the financial sector. This form of cyber attack causes a temporary outage of services, affecting the company’s operations.Some common examples of companies affected by these attacks were Amazon and Paypal.


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Addressing the Challenges in the Financial Services Industry

Breaking the Chains of Conventional Banking – Blockchain Technology

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