It's been more than five years since regulations around open banking, which reflected the changing nature of how consumers engage with banking and payments in this modern age, came into force. Cash is no longer the dominant form of payment; just 6% of the UK population uses cash for most things or everything, according to statistics from the UK government, with most people's experience with payments now predominantly digital. As such, the concept of open banking has become more ingrained in the systems and platforms we use every day.

One key element of this is account information services (AIS) which ventures like NatWest's Payit™ have launched. Providers that offer AIS allow businesses, including large organisations across sectors including hospitality and retail, utilities, and insurance, to give their customers a much better experience while making payments. It’s a form of data sharing that uses the same guardrails as the open banking protocol to offer control, security, and transparency to make life easier for customers and provide a competitive edge in the sector.

Tapping into changing customer behaviour

With the rise of the internet in the early 2000s and changing user habits, the archaic methods of siloing data within the walled gardens of massive financial institutions appeared less and less sustainable. This is where the concept of open banking emerged.

Open banking, which was born from the rise of the internet and the ability to access banking systems online, allows financial data to be shared between institutions through application programming interfaces (APIs). Banks have traditionally kept customer financial data closed off, but open banking has allowed customers to share their financial information between different platforms securely, including payment providers.

Open banking offers greater transparency and control for account holders and has led to a boost in the number of services that can be provided. Now, at least one in seven in the UK use open banking, according to research from Open Banking published in March 2024 — which was up from one in nine in June 2023. The number of open banking payments reached a record high of 14.5 million in January 2024, which represented a year-on-year growth of 69%.

As customers engage more through these services online, they also want the ability to access their information quickly and efficiently, in a friction-free experience. Whether setting up a direct debit with an insurance company or checking their account — theyu would like the option to glance at and review their bank account information too, among other functions. This much smoother user experience is only possible, however, if businesses embrace AIS, which providers like Payit™ now offer. Licensed AIS providers (AISPs) offer businesses’ customers an end-to-end encrypted view of information to improve the customer journey. This is a key cog in the mission to create a landscape that truly and completely accepts the principles of open finance.

Payit's mission to create a better customer experience

With the launch of AIS in June 2024, available to business customers who bank with NatWest, Payit™ can allow customer attribute sharing immediately, starting with the name of the account holder, the account number and sort code. These data points will soon be joined by transactions and a transaction history for affordability calculations. It's suitable for companies that need a nominated bank account to show the source of funds, or those that want to make easy and repeated attended payments like topping up a utility account or making a loan overpayment. Ultimately, though, it's underpinned by a one-click experience for all — and removes barriers to ensure a smooth and friction-free customer experience.

Merchants that take up Payit™ for AIS will be able to populate information with a one-click experience, capture explicit customer consent, enable real-time information sharing from bank accounts, remove the need for any intermediary agencies, and improve data capture accuracy by eliminating any manual input. This is alongside a batch of benefits for end customers including sharing data immediately, viewing all consents in one place — which expire within 90 days — and built-in protections against identity fraud.

Payit's AIS service can also streamline the direct debit experience. Customers authenticate with their bank using their mobile banking app or online banking login — with the bank then providing data to Payit™. Payit™, in turn, shares this data with the organisation to create the direct debit instruction — holding the consent as proof of the customer's authority to trigger the instruction.

Large businesses that want to make the payments experience smoother and fuss-free for their customers will gain a competitive edge in the market by embracing systems such as AIS, which is being wrapped up and bundled with NatWest's Payit™ Pay Online capability. Payit™ products are secure with locked down end-to-end encryption, and will help your organisation keep pace with industry-leading standards thanks to its ability to embrace innovations and tap into the latest customer trends.

For more information on how AIS could help your business visit Payit™ by NatWest .

Eligibility criteria and fees apply. You must hold a business current account with the NatWest Group and you will need to sign up to full Payit™ terms and conditions. You will need to allocate technical resources to work with NatWest to integrate the solution. Fees are based on the volume and average value of e-commerce transactions. Speak to a NatWest Relationship Manager for further information.

The banking sector is one of the most innovative and forward-thinking industries around. It was one of the early adopters of cloud computing and artificial intelligence tools, but it is still ripe for further digital disruption.

There is also quite a visible change in the way AI is used in banking, with the classic, data-driven AI evolving to more advanced use cases with generative AI. As with most industries, AI in banking started with automation and data analytics, but it quickly expanded to sophisticated applications in risk management, fraud prevention, and bespoke customer service.

With generative AI, the banking sector is set for further transformation, including changes to the way we save, spend, and generate money.

Challenging tradition with AI

One major area of change in banking is challenger banks – more commonly referred to as ‘Neobanks’ in the US. These are fintech firms that offer online banking via apps or software, with famous mobile banking apps, like Monzo and Starling.

The ‘challenger’ label is quite apt as these types of banks are seen as disruptors, changing the way we think about banking. They tend to be more agile and faster than traditional banks, though most of them are in some way partnered with the traditional banks, many for insurance reasons.

However, these fintech firms are using modern cloud-based technologies and data analytics to entice customers with innovative financial products and quick response services. This is largely a result of being cloud-native, with services built using software and big data tools, like machine learning and advanced analytics. The effect of this for the customer is a much more convenient, seamless experience.

For long-established banks, being subject to stricter regulation than most sectors and reliance on infrastructure that’s now antiquated both present blockers to modernization. This has left an opening for the challenger banks to lead the way on digital transformation in the sector.

By harnessing AI, banks and challengers are starting to create a digital environment that appears uniquely tailored to each of their respective users, which in turn fosters a sense of familiarity and ease that lifts the overall banking experience. This paints a rather exciting picture of the future of banking. With the ground-breaking power of AI and the innovative minds within the sector, we may be on the verge of ever more radical change in the way we use our money.

Generative AI

It’s the nascent nature of generative AI that’s leading financial services companies to rethink their operating models to address the technology’s rapidly evolving capabilities, according to McKinsey.

The industry sees generative AI as a “game changer”, with that sentiment backed by a 2023 banking report from the consultancy, which predicts it will lift productivity by 3 to 5% and enable a drop in operating costs. It also estimates this drop to be between $200 billion and $300 billion.

Key business functions are transformed as AI collects and analyzes huge amounts of data and enables a deeper understanding of customers and their personalized services. AI also enables banks to secure and protect customer accounts, increase returns on investments, and personalize content.

The growing capabilities of AI and the ever-increasing amount of data available mean that financial firms need to implement AI strategies or risk being left behind by their competitors and challenger banks. Scaling AI across a financial organization will face challenges, such as data silos, industry regulations, and data protection. Outdated banking infrastructures also lack the accelerated computing platforms required to train, deploy, and manage AI models, so improving existing applications and enabling new use cases is key.

According to a recent McKinsey forum on gen AI, more than 90% of the banking organizations represented reported having set up a centralized gen AI function as a way to effectively allocate resources and manage operational risk.

The consultancy’s survey also shows that about 20% of the financial institutions studied use a highly centralized operating model archetype. However, these are mainly large institutions whose business units can muster sufficient resources for an autonomous generative AI approach.

Chatbots and fraud prevention

There are many good examples of how AI is being used currently in the banking sector to enhance customer interactions, such as Barclay's fraud detection service.

This system monitors payment transactions to identify and prevent potential fraudulent activities with a proactive approach that not only protects customers, but also builds confidence in the bank's security measures.

Another great example is the Bank of America’s AI-powered research analysis platform Glass. Glass combines market data and bank models, and uses machine learning techniques to identify industry trends to then predict client demands. The results offer individualized investment advice and also positions the bank as a pioneer in using AI for strategic financial insights.

AI-powered chatbots are stalwarts at most banking firms, providing instant responses to customers and round-the-clock assistance (also part of the reason you’re less likely to deal with a human).

One example of what a successful chatbot looks like also comes from Bank of America in the form of its AI chatbot, Erica. Launched in 2018, it provides 24-hour customer support, efficiently handling queries and transactions, leading to reduced waiting times and improved customer satisfaction and in July 2023, it surpassed 1.5 billion interactions.

Advancements in computer chips and the cloud have driven not only new AI capabilities, but also innovation in the financial sector. However, data and language models are also fundamentally improving the services we use for our money. Data is crucial in the age of AI and investing in both cloud and AI is seen as essential for the future success of financial institutions.

Southeast Asia is fast becoming a key growth market in the forex space, offering financial services providers the chance to capitalize on a rapidly-evolving landscape ripe with opportunity. 

Forex development in Southeast Asia was the topic of a recent white paper from Paysafe, which revealed that retail forex trading has been “increasing in recent years” amidst an accelerating period of digitization across a host of economies in the region. 

Singapore, for example, has firmly established itself as a “major player” in international forex, according to the white paper. It’s the third-largest forex hub globally, ranked after New York and London, with nearly $1 trillion of forex trades passing through the city state every single day. 

Several of the world’s largest financial institutions, including Barclays, Citigroup, HSBC, and JP Morgan, also house their regional forex trading teams in Singapore.

Other countries in the Association of Southeast Asian Nations (ASEAN), such as Indonesia, Malaysia, and Vietnam, boast large populations and growing economies. 

Indonesia, for example, has the fourth-largest population in the world at 276 million and its economy could become the fourth-largest in the world by 2045. 

Similarly, between 2002 and 2021, GDP per capita in Vietnam has increased 3.6 times, and the country is currently on-track to become a “high-income” economy by 2045. 

With a swelling population in the region and impressive economic growth across a host of ASEAN countries, forex brokers have a prime opportunity to capitalize on an as yet largely untapped market. 

Similarly, the region as a whole has an opportunity to position itself as a “crossroads” for Asian, Middle Eastern, and European financial trade routes, according to Paysafe. 

Serving the unbanked

A significant portion of Southeast Asia is unbanked, meaning a large percentage of the population has no direct access to financial services. While this may appear to be a challenge for financial services institutions breaking into the region, there is an opportunity for providers to support a traditionally underserved portion of the global population. 

Paysafe believes that financial services organizations can play a vital role to “break through financial exclusion” in Southeast Asia and, long-term, consolidate their position as a leading provider in the space by capitalizing on the current wave of early-stage growth. 

However, while opportunities abound for brokers in the region, the industry does still face sizable hurdles – not least of all in terms of technology uptake among the population and access to payments methods. 

There are promising signs on the horizon, according to recent studies. Research from Kearney, for example, found that the digital economy in SEA is growing at a rate of 17% annually. 

In addition, by 2030 the e-payments industry is expected to reach an estimated value of between $600 billion and $1 trillion. 

Alternative research from the World Economic Forum also shows that smartphone adoption in the region is surging, with smartphone usage in Singapore standing at 87%. 

Malaysia and Thailand are also experiencing a rapid increase in smartphone adoption, statistics show. 

While technology uptake among the population is promising, bridging the gap between this rate of adoption and appropriate payment methods is a key hurdle for providers. 

Payment methods represent a far more complex and challenging prospect for forex brokers seeking to serve the population across Southeast Asia.

Sizeable unbanked populations in countries such as Myanmar and Cambodia means that payments into forex platforms pose a significant challenge. 

A prevailing cultural trend of cash-based payments across the region also presents challenges and could inhibit uptake in the long-term. 

Michael Schaper, adjunct professor at the John Curtin Institute of Public Policy at Curtin University in Western Australia, suggested that many individuals in SEA are still reliant on cash for everyday transactions, even in areas where digital transactions are growing as well. 

Consequently, Paysafe’s white paper says, “forex brokers will require some form of bank transfer to their platform in order to begin trading”.

Digital wallets could be the key

Paysafe believes that digital wallets could be a “secret weapon” for forex brokers to ensure uptake among consumers for a number of reasons. 

Digital wallets such as Skrill or Netseller, the firm said, offer “much better rates, and in many cases, are easier to use” than relying on bank accounts to deposit to a forex broker account. 

Security is also a focal point within this discussion. Hesitancy among the population and concerns over security can be addressed by digital wallets. 

“Using digital wallets also adds an element of security, as it allows individuals to make payments without sharing bank details,” the paper reads. “With mistrust in forex brokers rife in many SEA countries, this is an attractive perk.”

The simplicity of using digital wallets also offers advantages when one considers long-standing financial literacy challenges that are rife across the region. 

By making forex transactions simple and easy to understand they can bridge the gap of financial inclusion.

Lingering macroeconomic concerns

Macroeconomic factors could play a key role moving forward for organizations entering the Southeast Asia forex market, Paysafe also believes. 

The US Federal Reserve is “very likely” to continue raising interest rates, which could pose immediate challenges, Paysafe warns. Similarly, the continued dominance of the US dollar means that the region is, at times, beholden to economic conditions in the West. 

“Another economic crash like the 2007 financial crisis could flatten the growing forex market in SEA,” Paysafe’s paper warns

Regulatory conditions are also an acute concern for organizations entering the space, or seeking to in the future. Sub-standard or non-existant regulatory safeguards in the region have resulted in consumers “losing a catastrophic amount of money trading”, according to Paysafe. 

“Further regulation is needed in the region for forex to lose its reputation in some parts as predatory and dangerous,” the white paper states. 

Despite significant hurdles, there is ample opportunity for organizations to capitalize on this developing marketplace, and those that act swiftly in Southeast Asia can establish themselves as leading brokers in the region as the industry matures. 

To find out more about forex prospects in South East Asia, click here.

Over the past decade, financial technology has revolutionised the way businesses and consumers conduct and manage financial transactions, and data visualisation has played a big role in that revolution.

This whitepaper, explores 12 financial charts that developers can use to visually represent and communicate their data story and how FusionCharts can help devs simplify their FinTech application development.

Download now to learn more.

Provided by

Financial services organisations are facing a crucial moment. Niche financial categories, like peer-to-peer payments, have been completely disrupted by nimble SaaS entrants. FinTech startups are capturing the attention - and bank accounts - of a younger, more discerning audience.

As millennials and Gen Z become the next primary financial consumers, current industry leaders must quickly adopt a new marketplace strategy. The competition is gaining momentum through highly personalised digital experiences, all thanks to behavioural analytics.

Download this e-book to learn more about:

• Industry challenges and trends caused by digital transformation and consumer preferences
• The importance of first-party data, behavioural analytics, and a product-led approach
• How behavioural data drives personalisation across the entire customer lifecycle
• Tactics and strategies being used by the most successful disruptors in the segment

Provided by

Financial services have always been ahead of many industries in their use of consumer data technology. However, financial services are now facing challenges from increased regulation, high expectations from tech-savvy consumers, and more agile competitors.

Embracing further technology advancements will allow financial companies to remain competitive, and reduce costs while delivering even better customer service, but the question remains for CIOs on where to begin.

Download this guide which provides a clear direction for thought leaders on how to leverage big data analytics and how to grow share in the financial sector through digital capabilities.

Provided by

Financial institutions are looking to evolve digitally, as many other organisations have in recent years across all sectors, however the monolithic infrastructure - in lending and banking specifically - is complex and inflexible, with manual processes proving slow and insecure.

Financial services therefore need to invest in modernising their legacy infrastructure and adopt a move to the cloud to become more dynamic and more secure in today's climate.

Learn how IBM is enabling banks to digitally transform their lending process -- on their own terms -- to deliver better customer experiences.

Provided by

At a time when customers are expecting fully digital, omni-channel delivery of products and services, insurers need more than ever to become customer-centric and innovative.

Learn how building a foundational layer of capabilities, and making them accessible across the enterprise helps insurers stay in control and keep pace with innovation expected by customers.

Download this study for insight and recommendations for intelligent automations for insurance claims.

Provided by

As businesses have learned how to recover from one of the biggest global disruptions, being prepared for any impact on operations is wise moving forward, with finance as a cornerstone of an organisation’s disaster response strategy.

The role of finance is changing, as it plays a more strategic role in project prioritisation and maps out possible scenarios, including financial implications caused by disruptions.

Download this whitepaper to learn how finance is critical in your organisation’s forward planning, in order to be more resilient and more agile.

Provided by

.

There has been a lot of change in how businesses need to operate over the past two years, across sectors and geographies. Insurance is no different. For decades, the pace of change in insurance has lagged comparable industries including financial services, meaning this period of rapid shift to new ways of thinking is causing major upheaval in the sector.

Download this whitepaper to examine how the insurance world is changing, the role of payments in transforming insurance, and understanding the value of payments will be a key differentiator in the quest for market share.

Provided by

For many of today’s financial institutions, embracing innovative tools and agile approaches is more than smart strategy—it’s a means for survival.

Read this MIT Technology Review and discover how financial institutions are using the mainframe for not only millions of transactions but also for modern innovative initiatives like DevOps, hybrid cloud, and data analytics to address their evolving business needs.

Provided by

Family shopping trips and keeping track of spending has arguably become much easier since the inception of the internet, especially in recent years. Although going cash-free has made spending more abstract, anyone in the world can download an app, or go online, to satisfy their shopping needs. This is instead of trawling through shopping centres and queuing up at banks. Instant check-outs, as well as till-free shopping, has further expedited this process, giving customers the ability to find a product and order it as quickly as possible while charging the cost to a card previously used.

It’s great for most Western countries, where markets revolve around plastic payment cards, especially with COVID-19 encouraging so many retailers to go cash-free. This isn’t the norm, however, in many other regions throughout the world, such as the Baltics, where credit and debit cards are scarce.

As Nikulipe CEO Frank Breuss explains, merchants often struggle to offer payment methods people are comfortable using. “When you talk to people in the UK or in the US, they often ask what the local payment methods are because they assume everybody has a card,” Breuss says. “But the reality is, in many markets around the world, the preferred method of payment isn’t card. In the past, local payment methods were called “alternative payment methods”, but if you look at the Netherlands, the alternative payment method has a 70% market share, so it isn’t the alternative – the card is the alternative.

“Similarly, in countries like Lithuania, online shops offer credit cards and PayPal, but the preference of consumers is actually to pay using their bank account. This could be a problem for merchants as they need to have a button on the check-out page for each bank, which adds complexity and can make the consumer think twice about their purchase.”

Unlocking new payments

These alternative payment methods include familiar ways to pay, such as direct exchanges from bank accounts rather than via debit cards, online wallets such as PayPal, AliPay and Tencent, as well as buy now, pay later services like Klarna. Other, less familiar payment methods include paying using direct debit and, in some regions, using cash, where customers can buy online but pay at their local post office or corner shop.

Nikulipe’s Banklinq platform collates the various methods and financial service providers across a region for consumers to use when purchasing products and services online. In practice, it means Banklinq becomes the only payment method merchants need to offer during the checkout process for potentially hundreds of different banks and payment methods, removing the complexity that currently exists for many vendors. This is made possible thanks to the Payment Services Directive (PSD2) open banking legislation that makes it compulsory for banks to offer application programming interfaces (APIs) for third parties to securely, and with permission, pull information from customers’ accounts.

The API is based on the NextGenPSD2 framework created by the Berlin Group, an association of more than 40 banks based in the EU, and was modified to match Nikulipe's implementation. The NextGenPSD2 framework offers an open and interoperable set of APIs to ensure the safest and most efficient way to provide data securely.

It reduces complexity and costs when it comes to accessing accounts, referred to in the industry as XS2A, and addresses the problem of multiple competing standards in Europe. It also shares the same goals as the Euro Retail Payments Board, enabling European banking customers to benefit from banking as a service (Baas) products by granting third parties safe and secure access to their bank accounts and financial data.

Despite this legislation, Breuss laments that one of the challenges Nikulipe has had to overcome is the quality of the APIs they integrate with. “Nikulipe has been able to take advantage of the technical and legal opportunity open banking has created,” he says. “However, although the legislation is very clear that the banks have to offer an API, the reality is that the quality and the promise of these APIs is very different from the APIs the banks deliver.

“It sounds very easy to connect to open banking API's but banks often do the bare minimum to enable these integrations because they see it as enabling competition, which has been tricky to overcome while providing a smooth and efficient solution to consumers.”

Falling at the final hurdle

The need for banks to provide APIs so people can make online purchases more easily may have been hard to envision in Northeast Europe two years ago. Breuss paints a picture of people stuck in their ways, especially in the rural areas, but the pandemic, he continues, has forced more people to go online for more of their products. This has created a necessity for merchants to offer payment methods that many more people are comfortable using.

Although there are no specific future plans for expansion, he adds, Nikulipe will continue to enter markets where payment methods offered by merchants don’t match the preferences of customers. “I think the pandemic has affected the growing markets in three ways,” he explains. “Firstly, merchant industries that were reluctant to go online are now online. Second, I think new consumer groups have been met, and finally, mainly outside Europe, the lockdown opened up the market for streaming products and has meant consumers are used to subscription models.

“Now, the trend for local payment methods is not a new one and it's not one that’s come from the pandemic, but I think this is a trend that all businesses need to be focussed on. Merchants should not only think about how the local market wants to pay, because anyone who doesn’t want to pay with a card, for example, will not purchase from them. The worst thing that can happen is you invest money to get a customer to your website and put something in a cart, just to lose them because they can’t pay as they want to. That’s why offering local payment methods will be a key success factor for businesses going forward.”

Deliver the seamless, speedy, and mobile-friendly interactions that customers today expect.

Your restaurant can reduce friction for its customers by adopting self-serve technology for ordering and payment. People expect to use their smartphones wherever they go, so use this to your advantage with mobile-friendly at table options.

Download this whitepaper to find out more about:

• The pros and cons of tablet vs mobile ordering
• The pros and cons of web apps vs native apps for ordering
• Steps to getting mobile ordering right
• How to measure the success of your mobile ordering solution

Provided by

Gain a better understanding of the evolution of businesses adopting digital self-service technologies, from Chipotle to Starbucks, and see how the pandemic has put pressure on the need for such tech.

This whitepaper will show you:

• Statistics on implementation of digital ordering tech
• Case studies with Center Parcs and the Chesterford Group
• Predictions for where this service will go next

Download it now for your three next steps for progressing digital ordering in your hospitality business and start improving efficiency and the customer experience today.

Provided by

Make sure your hospitality business gets the most out of its Pay at Table solution so you can deliver memorable customer experiences that keep your business competitive.

This whitepaper helps you see how your solution fits in with your wider digital strategy so you can better measure its success.

Download the resource now to see how to:

• Create clear KPIs
• Make the Pay at Table experience as inclusive as possible
• Increase staff buy-in to the new tech
• Deploy your solution successfully

Provided by

Around $90 million has been mistakenly sent to users of popular DeFi staking protocol Compound following a bug in a recent upgrade.

The company's founder took to Twitter to plead with users to return the platform's crypto tokens, while also threatening those refusing to do so.

"If you received a large, incorrect amount of COMP from the Compound protocol error: Please return it," Robert Leshner, founder of Compound Labs, tweeted on Thursday. "Keep 10% as a white-hat. Otherwise, it's being reported as income to the IRS, and most of you are doxxed."

Compound is a decentralised finance (DeFi) platform with a liquidity mining program that rewards depositors and borrowers, but usually at a rate of a single-digit for annual percentage yield (APY).

A user known as 'napgener' first noticed an issue with Compound payouts, flagging three Ethereum transactions where users received around $15 million in COMP tokens in exchange for borrowing and supplying small token quantities for the likes of USDC, ETH and DAI.

DeFi protocols like Compound are designed to recreate traditional financial systems, such as banks and exchanges, but with blockchain powered by automated smart contracts. On Wednesday Compound attempted to roll out an upgrade, but it appears to have included an error.

"The new Comptroller contract contains a bug, causing some users to receive far too much COMP," Leshner said. "There are no admin controls or community tools to disable the COMP distribution; any changes to the protocol require a 7-day governance process to make their way into production."

More and more users began reporting over payments after Leshner tweeted about the bug: $29 million worth of COMP has been claimed in one transaction, while another has said they received 70 million COMP tokens (thought to be worth about $28m).

Leshner didn't specify the issue with the update, however a developer from another DeFi crypto exchange, SushiSwap, tweeted that the fault could be blamed on a "one-letter bug" in the code.

Many startups dream of the day they get their Big Break, but not all of them pause to consider whether they will actually be able to handle the rapid increase in demand for their services.

For Currensea, their Big Break was delivered by their appearance on Channel Five’s long-running consumer technology series The Gadget Show.

“We didn't know how this was going to play out,” recounts Craig Goulding, who co-founded Currensea in 2018 with fellow former JPMorgan employee James Lynn.

“When it aired, things went absolutely berzerk, traffic to our website and application went through the roof. We were issuing one card every six seconds – totally, utterly insane,” he tells IT Pro.

Sudden influxes of traffic, often prompted by media coverage, are not a daily occurrence for many companies. However, when they do happen, many websites cannot handle the demand and buckle up under pressure. This means that the company can miss out on new orders and – most importantly – profits.

For Currensea, however, this moment was made possible by the elasticity and scalability of the cloud on which its website is built.

“The platform just handled that surge in volume,” says Goulding. He describes the appearance on the show, as well as the subsequent frenzy, as “an amazing experience” that was fully enabled by technology, allowing Currensea to sit back and reap the rewards.

“One of the great things about the cloud is that you don't have to worry about servers,” he tells IT Pro. “So you can concentrate on building and running applications and business logic, rather than having to worry about having to manage the infrastructure. Amazon Web Services just takes care of all that for you.”

Goulding adds that this was especially important for the small team of engineers that makes up Currensea, allowing them to focus on “building products and building differentiation, rather than having to worry about the kind of nuts and bolts of the service and goodness knows what”. The experience with The Gadget Show helped Goulding realise the importance of the ability to scale up and scale down on demand, especially when these kinds of peaks in traffic are rare. It also helps the company save money.

“If you're not using it in the cloud then you're not paying for it, so it's a very flexible and adaptable model as well,” he says.

The cloud offers more than just peace of mind, though.

“Another huge benefit is just the number of tools they have in their environments, which you just point and click and configure, then you magically get them, which is incredible. Again, if you're having to kind of build that up yourself, it would be a hugely conservative resource, so it's just a massive accelerator for us,” he says.

“Then you've got the resiliency as well. You're spread across multiple data centers and everything kind of fares over if there's any issues in one data center. So, you run a 24/7 operation with no downtime.”

Saving the oceans, one card at a time

The cloud has been hailed as a life-saver for many industries, especially during the COVID-19 pandemic. For Currensea, however, it’s allowing the challenger bank to channel all its attention into its environmental efforts.

While many banks are undergoing a digital transformation, offering a brighter and more convenient future, what actually lies ahead might be rather more bleak. Extreme weather, food shortages, and pollution are only the tip of the environmental iceberg, with the gradual melting of ice caps and rising sea levels threatening to submerge coastal cities such as Miami as early as 2050. All of these issues could impact everyone’s long-term plans – but could something as small as a bank card help reverse them?

Whether debit or credit, banking cards are most often made out of polyvinyl chloride, more commonly known by the initials PVC, which is notoriously difficult to recycle, usually ending up sitting in landfills for centuries to come. This has prompted Currensea to opt for biodegradable cards that, when disposed of, will take about a decade to decompose. However, the challenger bank’s environmental drive isn’t limited to cards only: Earlier in 2021, the company launched a new feature that enables customers to contribute to cleansing the oceans of plastic waste every time they spend money abroad, with a pledge to remove 2.5 times the amount of plastic they produce every year.

“For each card that we're producing, we’re also extracting plastic from the oceans – more plastic than we're actually introducing to the world,” explains Goulding.

When asked about the problem of greenwashing – companies branding themselves as sustainable for marketing purposes, with limited positive impact for the environment – Goulding says he is “very conscious of that”.

“You either do it properly, or you don’t do it at all,” he says.

Developing a lucrative Fintech startup is the toughest of journeys and while the rewards can be rich - with some of today's big names like Starling, Transferwise and Stripe having valuations in the billions - others have fallen fast and lost fortunes in investment.

The arrival of Fintech was a result of the 2008 financial crash, with challengers to the industry's status quo reinventing everything from traditional banking to payments to credit.

Pleo, for example, is a provider of expense management software and smart credit cards, which now has unicorn status with a $1.7 billion valuation.

But its CTO Petr Janda says success can only be achieved when you have the right technology infrastructure to scale, especially when underlying ecosystems have limitations.

"One of the key decisions for any Fintech startup is to understand what kind of experiences they want to deliver to their users,” he tells IT Pro. “With that, they can decide where in the IT and technology landscape is important to invest in – and perhaps build very specialised and customised solutions in-house where a readily available out-of-the-box solution isn't good enough.

"With the right balance, they gain the flexibility to drive amazing products to the market with a fast-paced innovation cycle."

Of course, not every new startup can afford such a self-build approach and Devie Mohan, a Fintech industry advisor and co-founder of research company Burnmark, doesn't believe that is always necessary.

As the author of The Financial Services Guide to Fintech, she cites the burgeoning opportunities of tried-and-tested technologies as part of pre-built tech stacks with banking as a service (BaaS) or software as a service (SaaS) models across payments and lending.

However, she warns that IT security and governance is now a fast-moving challenge; recent Burnmark research found the complexity of data protection and cybercrime requirements had added a huge burden to recently-launched startups, with new regulations created in almost every country in the world.

"There is also an industry-wide push to replace legacy systems in banks and traditional organisations to deal with these challenges, as well as handle new types of data coming into the Fintech ecosystem,” she says. “I expect there to be heavy investments made in this area, as 60% of ecosystem players have identified this as a challenge."

Be prepared to take even greater risks

Finding the right talent is usually the hardest part of any startup growth path but CEO of freemium open banking data platform Nordigen, Rolands Mesters, suggests that you must find a CTO or CISO prepared to rip up conventions.

"The role is completely different than in a legacy business,” he says. “Your appetite for risk has to be a lot greater. It's not about controlling risk, but instead embracing it and making it work to your advantage. The main difference is that legacy businesses aim their activity at staying relevant, but a Fintech startup is doing everything to become relevant."

Another big challenge new Fintechs will face, according to Jonathan Lister Parsons, CTO at PensionBee, is deciding whether to focus on a single market niche or pursue a path that leads to being a financial 'super app'.

"It's highly tempting to believe that in order to corner a market in financial services you need to offer something to everyone, throughout their financial landscape. I think this can work in some cases, but it's a strategy that can result in a package that offers only watered-down versions of products done better elsewhere,” he says.

"We believe in being the best possible pension experience for our customers, and playing nicely in the financial ecosystem, integrating with partners where the combination of our products provides a better experience, or enables brand new services."

Don't duplicate someone else's existing build

PensionBee's strategy was to build the company in the cloud so it could scale easily as it grew, and use the inherent flexibility for new products and services to be added, while supporting automation. Lister Parsons cites a strategy from JP Rangaswami, a much-heralded tech expert who has held roles such as chief scientist at Salesforce, and group head of innovation and chief data officer at Deutsche Bank.

Boiled down it suggests that if a problem is specific to your business, it's worth the time to build a solution to solve it, but if it’s not, someone has likely built a commercial product or launched an open source solution you can harness.

Lister Parsons adds: "It's crucial to use a flexible and scalable base for your technology from the beginning when you are building a first-mover advantage in your industry. As you're building something new, you need to be able to change direction easily, and once you hit product/market fit, you don't want to have to re-platform as you scale.

"Once you've got the foundation in place you can work on further development and, by investing in incremental improvements, over time you'll have a product that becomes harder and harder for a competitor to replicate from day one."

Another important factor to remember is you also don't need tonnes of tech knowledge to launch a successful Fintech startup. Simon Rabin, founder of savings and investments platform Chip, admitted he and his co-founder Alex Latham only had "a few lines of HTML between us" but they have seen this four-year-old Fintech grow to 350,000 users.

Chip hired a CTO to scale, but Rabin cautions: "I think Fintechs are very quick to grow, build and innovate – it's what sets them apart from incumbent finance providers. However, the infrastructure hasn't caught up with the agility of Fintechs yet."

Creating the next unicorn is achievable, but it takes more than hope and a strong will. Anna Frankowska, chief commercial officer at Aventus and a Forbes 30 Under 30 Europe Technology award-winning entrepreneur, recommends founders consider two crucial questions from the outset.

"Firstly, ‘how are we going to stand out?’, and secondly, ‘am I solving an existing problem or creating a solution in search of a problem?’. If you can answer both those questions, then you are set for success," she says.

Visa has announced plans to acquire cross-border payments expert Currencycloud for an undisclosed sum. The acquisition builds on the companies’ existing partnership.

Currencycloud's cloud-based platform provides banks and financial services providers an all-inclusive set of APIs for managing foreign exchange transactions, multi-currency wallets, and virtual accounts. Additionally, customers are notified of transactions in real time.

Upon acquiring Currencycloud, Visa will enhance its existing foreign exchange capabilities and enable new use cases and payment flows for banks, financial institutions, and partners.

Currencycloud will also improve payment transparency and expedite time to market for clients seeking to offer digitally first and convenient international payment services.

“The acquisition of Currencycloud is another example of Visa executing on our network of networks strategy to facilitate global money movement,” said Colleen Ostrowski, global treasurer at Visa.

Ostrowski continued, “Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments. With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers.”

The Visa-Currencycloud deal is subject to regulatory approvals and other customary closing conditions. Currencycloud will retain its current management team and continue to operate from its London office.

“At Currencycloud, we’ve always strived to deliver a better tomorrow for all, from the smallest start-up to the global multi-nationals,” said Mike Laven, Currencycloud CEO.

“Re-imagining how money flows around the global economy just got more exciting as we join Visa, “The combination of Currencycloud’s fintech expertise and Visa’s network will enable us to deliver greater customer value to the businesses moving money across borders.”

The Reserve Bank of India (RBI) has banned Mastercard from taking on new customers from 22 July following a dispute over the company's failure to abide by data storage policies.

In April 2018, the RBI released a Storage of Payment System Data notice which stipulated that payment system providers should store payment data in India to ensure “better monitoring”. This includes the full end-to-end transaction details and information collected or carried as part of the message or payment instruction.

However, for the “foreign leg” of the transaction, the data can also be stored in the foreign country if required.

Payment system providers were given six months to implement this change, which should have been completed by 15 October 2018, and report compliance to the RBI, as well as submitting an audit report to the bank by December. Mastercard is said to be still in breach of these terms, according to the RBI.

“Notwithstanding lapse of considerable time and adequate opportunities being given, [Mastercard] has been found to be non-compliant with the directions on Storage of Payment System Data,” said Yogesh Dayal, chief general manager at the RBI.

The RBI has now placed a freeze on the onboarding of new Mastercard customers across the country, and Mastercard must advise all card-issuing banks and non-banks to conform to these directions.

A spokesperson from Mastercard said it is "fully committed" to its legal and regulatory obligations in the markets it operates in.

"Since the issuance of the 2018 directive requiring on-soil storage of domestic payment transaction data, we have worked closely with the RBI to ensure that we comply with the requirements," said the spokesperson. "While we are disappointed with the stance taken by the RBI today (July 14), we will continue to work with them and provide any additional details needed to resolve their concerns."

The 2018 policy change emerged following a recognition that the payment ecosystem in India had expanded “considerably” with the emergence of new payment systems, players, and platforms.

“Ensuring the safety and security of payment systems data by adoption of the best global standards and their continuous monitoring and surveillance is essential to reduce the risks from data breaches while maintaining a healthy pace of growth in digital payments,” the bank stated.

In order to have “unfettered access” to all payment data for “supervisory purposes”, the RBI decided that all payment system operators had to ensure that data related to payment systems operated by them should be stored only inside the country.

Visa is set to acquire Swedish fintech firm Tink for €1.8 billion (£1.5 billion), the financial giant announced today, which will see it use its technology to accelerate the adoption of open banking.

Tink is a European open banking platform that allows financial institutions, fintech firms, and merchants to build tailored financial management tools, products, and services for consumers and businesses based on their financial data.

The fintech firm, which is integrated with over 3,400 banks and financial institutions, will retain its brand and current management team as well as its headquarters in Stockholm.

Visa is aiming to use Tink’s technology to help accelerate the adoption of open banking throughout Europe.

“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” said Al Kelly, CEO and Chairman of Visa. “By bringing together Visa’s network of networks and Tink’s open banking capabilities we will deliver increased value to European consumers and businesses with tools to make their financial lives more simple, reliable and secure.”

Visa is also hoping to give consumers better control of managing their money and financial data through the acquisition, and businesses will have a greater and more customised range of tools to operate digitally and securely, the firm revealed.

“We have built something incredible and at the same time we have only scratched the surface,” said Daniel Kjellén, CEO and co-founder of Tink. “Joining Visa, we will be able to move faster and reach further than ever before.”

In March, Visa announced it would allow customers to settle transactions on its payment network in a stablecoin cryptocurrency linked to the US dollar called USD Coin. The option to pay in this format was to be made available through Visa’s pilot programme with cryptocurrency platform Crypto.com, and it was reportedly going to extend it to other partners later in the year.

The UK has recorded its 100th tech firm to be valued at $1 billion or more, according to research from Dealroom and Tech Nation.

The milestone means that there are more than double the number of unicorn companies in the UK than its closest European rival Germany, which currently has 42 unicorn startups, and is only behind the US and China internationally.

The UK had 70 startups valued at $1 billion as of 2019, with 30 more added over the course of the pandemic and 13 of those reaching the valuation in 2021. In 2017, there were just 44 tech unicorns in the UK, which represents a 127% increase over four years.

The majority of the startups, 34%, are fintech companies, with 14% in healthcare, 8% in travel and transport technology, and 4% in gaming. The country's 100th unicorn is Tractable, a fintech that builds digital tools, having raked in $60 million in a recent funding round.

"Tractable is a UK success story, built by people who studied AI at British universities, and joined together at Entrepreneur First, a UK programme for scaling great companies," the firm's CEO, Alex Dalyac, said. "While most of our 200 staff are located in the UK, over 90% of our revenues are generated abroad, and we count over 25 of the world's largest insurers as our customers. We're proud to be the UK's latest unicorn, and the world's first computer vision unicorn for financial services."

The UK's biggest unicorns are currently analytics firm Market, valued at $41.3bn, payment platform Wordplay, valued at $39.1bn, and semiconductor giant Arm, which is valued at 36.4bn. The startups that became unicorns in 2021 include Starling Bank, digital price comparison site Bought By Many and connected car firm Wejo.

The sheer number of unicorns is a good measure of the overall health of the UK tech economy, with these startups raising €13.2bn ($14.5bn) since the start of the year, beating the previous record of €8.1B ($8.9bn).

"With UK tech unicorn creation growing by 127% over the last 3 years, it's clear that the UK tech sector has become a rapidly growing hub for unicorns, culminating in 100 companies with unicorn status today," said Gerard Grech, chief executive of Tech Nation.

"It's a privilege to have worked closely with many of these inspiring companies, helping them navigate scaling challenges as they continue to transform every corner of UK industry."

Welcome to the IT Pro Panel Profile, where we talk to the CIOs, experts and IT leaders that make up the IT Pro Panel, and discover their top tech, pet peeves and IT inspirations.

The past few years have seen challenger banks and fintech startups revolutionising how we manage our money - but that doesn't stop with adults. RoosterMoney is an app designed to help parents manage their childrens' pocket money, introducing them to the world of budgets and savings.

The company recently rolled out a pre-paid debit card for kids, and CTO Jon Smart has been instrumental in ensuring that all the technical frameworks and infrastructure needed to support real-time payment processing are stable and performant. Working with his team, Jon has been getting stuck into the challenge of building a child-friendly fintech firm.

Jon Smart

CTO - RoosterMoney

Describe your role in 20 words or fewer.

As CTO at RoosterMoney, I oversee the product and development teams, and advise on all things technical within the business.

What was your first computer?

My first computer was a Commodore 64; I remember programming a game in BASIC from a book. I also have fond memories of the psychedelic loading screens whilst a game was loading from a cassette tape.

What do you like most about working in IT?

I love the challenges presented from such a large landscape of opportunity. There's always an area receiving innovative ideas that can inspire others. I find being a part of both the innovation and the use of different technologies is really rewarding.

If you could magically get rid of one piece of technology forever, what would it be, and why?

For most technology I could think of that has had a negative impact, I could think of another that either learnt from that mistake or was inspired by aspects of it. That being said, I'm yet to see how ransomware will fit into this evolution - especially when it's used against companies trying to benefit society.

What future tech innovations are you most excited about?

Ignoring those that are yet to appear and are likely already in the pipeline; I like to keep an eye on wearable innovations and how we integrate technology in ways that become less cumbersome and more accessible to all.

Who's your biggest inspiration in the world of tech?

Steve Jobs and Jony Ive were inspirational during key moments of my career, bringing the marriage of design and engineering together.

If you're a senior IT decision-maker and you'd like to apply to be part of the IT Pro Panel, please email panel@itpro.co.uk.

This article originally appeared in the April edition of IT Pro 20/20, available here. To sign up to receive each new issue in your inbox, click here.

Lithuania is only a small country on the outskirts of the European Union (EU) with palatable weather and complicated history; a modest economy and population a third the size of London's would hardly render it a key player on the global stage. You will, therefore, perhaps be forgiven for overlooking the fact that this Baltic nation, rich with lavish landscapes and stunning castles, has, in recent years, surged to become Europe's dominant force in fintech.

According to Findexable's Global Fintech Index 2020, Lithuania is the fourth most powerful fintech hub in the world, ranking behind the US, the UK and Singapore, leaping 14 places between 2019 and 2020. While it's an astonishing feat, it's no happy accident and follows years of calculated efforts by the nation's biggest institutions. The parties involved include not just politicians and the Bank of Lithuania, but corporations, accelerators, startups, investors, and others, all working towards the common goal of putting Lithuania's fintech scene on the map. Brexit, meanwhile, has only served to fuel this mission, with companies seeking a viable base from which to serve EU customers, now that the UK has left the single market.

Lithuania's recently appointed vice-minister for finance, Vaida Cesnuleviciute, reflects on the challenges Lithuania once faced, chiefly that its legacy financial services industry was weighed down by a lack of competitive edge. "Our banking sector was one of the most concentrated, or even the most concentrated, in Europe," she tells IT Pro. "We thought we needed to foster competition and to do that we thought of not only focusing on the traditional banks, but promoting this emerging fintech trend. What happened is that we started to see how to make our jurisdiction more attractive for fintech companies."

The place to do business

Fast forward to 2021 and huge names like Revolut and ConnectPay lace a growing index of more than 200 companies revelling in what they describe as a fintech-friendly environment. This comprises several pillars including favourable regulations as well as a flowing pipeline of skilled workers. Member of the board of the Bank of Lithuania, Marius Jurgilas, says that Lithuania's appeal isn't obvious, and so its various institutions undertook a lot of risk in trying to foster this environment. "Due to coincidences, or specific policies, it happens to be, or is already emerging to be, one of the hotspots for tech companies due to a very compact and, yet, dense talent pool," he explains. Jurgilas, known as the 'Godfather of Fintech' in Lithuania, explains that the skill base swelled with the arrival of major companies over the course of the last decade, including Scandinavian commercial banks, as well as global giants like Western Union in 2011.

"It really developed a pool of talent; very young individuals going into this field and all of a sudden being exposed not to some local firms who are just doing the across-the-street type of finance, but a global business perspective," he adds. This exposure, in turn, inspired an entire generation to aim high in their own ventures, leading to an explosion in the number of startups. This coincided with a push from the public sector to introduce more competition, reinforced with a political willingness to take on the risk. Companies with Lithuanian bases now freely sing the praises of this business culture, lauding various aspects of this regime ranging from licensing to the space they're given to experiment with technology.

Banking challenger Revolut first opened its Lithuanian office in the capital, Vilnius, in 2017 due to this environment, as well as easy access to specialists. CEO of Revolut Bank (EU), Virgilijus Mirkės, tells IT Pro that Lithuania created a clear and transparent process offering startups assistance from the Bank of Lithuania. This is also balanced with strict rules on supervision, and a directive that companies must contribute back to the economy. For ConnectPay CEO Marius Galdikas, whose company is headquartered in Vilnius, one of the best innovations was the regulatory sandbox. This meant startups could test systems under development in a closed environment, allowing them to evaluate product performance in real-life conditions and make adjustments before release. Seeking electronic money licenses, required to operate in Europe, was also made to be significantly easier; while most countries usually take a full year to issue these licenses, the process in Lithuania takes three to six months.

'If you aim for mediocrity, there's very little point in starting'

"We managed to do something very significant, and we managed to put a lot of effort into maintaining and advancing this," Cesnuleviciute says. From the outset, the various institutions involved in hatching this plan aimed high, with the explicit intention of catering to all fintech firms, regardless of size or need. She adds that if you aim for mediocrity, there's very little point in starting in the first place.

The government of the day mobilised several institutions to establish an intergovernmental working group, with the Ministry of Finance playing a central role. This meeting of minds culminated in a national action plan, written into government strategy, endorsed by the prime minister, led by the finance minister, and implemented by the central bank. Beyond its regulatory 'sandbox' and licensing regime, the Bank of Lithuania rolled out a platform known as CENTROlink to give fintech firms access to an account with the central bank, something that was previously reserved only for commercial banks. Secondly, it implemented technology to allow fintech firms and other companies to onboard customers remotely, vastly reducing one of the biggest barriers to selling their services and products. As a result of these efforts, Lithuania's digital economy is growing four times faster than the wider economy, while this fintech-friendly environment sparked a "gravitational effect" that's attracted more and more companies over time.

Other entities, including accelerators and investment firms, have also played a key role, with accelerators 70V and Rockit serving as prime examples. Head of Rockit, Šarūnė Smalakytė, tells IT Pro that her company provides coworking services and an events platform, in addition to startup incubation and acceleration programmes. "As an incubator and collaborative space," she says, "we have helped multiple Lithuania-based fintech firms including Revolut and NIUM to start their business journeys."

Rockit plays a role in the fintech community by encouraging collaboration between different stakeholders. It also surveys and maps out the country's fintech ecosystem annually, providing intel for both businesses and investors. It's a similar role to that played by Startup Wise Guys, another incubator that connects businesses and helps startups experiment with new ideas. "As an accelerator and fund, we invest in startups in their foundational days to provide them financial resources and skills that will help them validate products in the market and start getting traction financially," Startup Wise Guys partner Jone Vaituleviciute says. "Lithuania has already built a reputation as a desirable destination for foreign fintech startups. There are now also a number of homegrown Lithuanian rising stars, such as TransferGo, Ondato, kevin., Paysolut and HeavyFinance. These companies, which we invest in or connect to our participating startups, are generating enormous amounts of talent and know-how. And they are becoming a catalyst for the emergence of new waves of fintech startups."

The shadow of Brexit

Lithuania's unprecedented surge coincides with the uncertainty that descended onto London's own fintech scene following the outcome of 2016's Brexit referendum. Although the UK was once considered the gateway into the EU, this mantle has now fallen into the hands of several pan-European hubs, Mirkės says. For Revolut Bank, its Lithuanian base and licenses are now essential for operating in Europe, which is the same story for many fintech companies hoping to serve EU customers through the so-called passporting regime.

"It's not a good thing that [Brexit] happened," Cesnuleviciute laments, "but for Lithuania, especially for fintech, it provided momentum. I think we were kind of an obvious choice when thinking of where to get these licenses." With the UK no longer in the picture, Lithuania became the country to have issued the most e-money licenses. While only a handful of firms have fully relocated to Lithuania due to Brexit, Jurgilas agrees that you cannot dismiss Brexit's role in boosting Lithuania's fintech scene, especially in terms of skills.

He's noticed, in particular, a steady flow of skilled workers from the UK and other countries back to Lithuania. This coincided with a rise in opportunities due to the growing number of companies operating in the country. "Due to Brexit, due to the pandemic and the ability to work remotely," he explains, "they're finding that living and working from Vilnius, Lithuania, is pretty nice – minus the difficulties of living in a [megacity], plus the benefits of being close to your roots, your family, extended family, and being able to contribute into this vibrant new ecosystem, which is global."

Another reason so many businesses have been keen to establish Lithuanian subsidiaries is to cope with what they expect to be diverging regulations between the EU and the UK. We've already seen difficulties arise from this in terms of data protection. Although the UK recently obtained a draft data adequacy decision, meaning data can continue to flow between territories, this is fragile, and may be revoked in future should the UK diverge too far from GDPR. Similarly, Jurgilas insists that businesses hoping to serve customers in both jurisdictions will be stuck in the middle as the regulatory environments continue to drift. One early example of this divergence manifests in crypto assets, with the EU seeking to regulate blockchain-based products through its Markets in Crypto-Assets Regulation (MiCA).

With the Brexit effect still not fully settled, and Lithuania continuing its meteoric rise, could the small Baltic nation exploit this situation to overtake the UK? Galdikas seems bullish of its chances, explaining that while the UK will remain a strong player, there's a real opportunity for Lithuania to become the leading hub if it continues in its current direction.

Both Jurgilas and Cesnuleviciute, however, downplay this notion. For Lithuania's Godfather of Fintech, in particular, there would be downsides to wearing such a heavy crown."If you would ask me a year ago, probably I would be very flamboyant and I would say 'absolutely, of course, why not'," Jurgilas says, "but with a pandemic type of situation, I think that I'm becoming more pragmatic. Maybe we have achieved what we, as a nation, needed.

"When we proposed to the government that let's be the centre for fintech in the region, nobody believed that it could be achieved, but it was a target on which we built everything. And we did it in a rigorous and orchestrated way. Now, is there a reason – is there a need – to be the global leader? Being a global leader comes with costs, and I'm not sure that our society or politicians are ready to accept those costs.

"Maybe the focus needs to be in a different place, I don't know, green agriculture or some other area. Our president is talking about making sure that inequality is being addressed as a primary objective. I'm feeling that maybe the subject of fintech is still up there, but, at the same time, we have other social issues to be talking about, and maybe technology can be used to solve those issues."

Welcome to issue 16 of IT Pro 20/20.

This time we look at our strained, confusing, and often contentious relationship with artificial intelligence, and how that is shaping development.

We’ve addressed some of the more concerning issues surrounding the eager rollout of the technology, including whether AI has the potential to make us lazy, and whether it will make spying on employees a simple matter of flicking a switch.

It’s not all artificial intelligence, though. As a special bonus, we’ve also spoken to some of the leading figures behind Lithuania’s campaign to become Europe’s fintech capital - ousting the UK in the process.

The next IT Pro 20/20 will be available on 31 May – previous issues can be found here. If you would like to receive each issue in your inbox as they release, you can subscribe to our mailing list here.

Creatio, a global software company that provides a low-code platform for process management and CRM, has announced it’s partnered with digital solutions provider PositiveEdge Solutions.

Creatio’s low-code platform automates lending processes and consolidates front-, middle-, and back-office processes to boost customer engagement with targeted offers at the right time, on the right channel.

PositiveEdge Solutions and Creatio’s new partnership will enable financial institutions to leverage artificial intelligence (AI) and machine learning (ML) technologies to tackle areas where legacy systems are too complex and expensive to serve the needs of banking, financial services, and insurance (BFSI) clients.

“Banks and Insurance companies in India have to differentiate themselves in the highly competitive market they operate in, and by using Creatio’s lead scoring model, these organizations can focus on the hottest leads, and streamline workflows with the next best offer option,” said Amit Kumar Singh, chief operating officer at PositiveEdge Solutions.

“With this unique offering from Creatio called churn prediction, FIs and Banks can avoid customer loss to competitors. We are very confident of a successful partnership with Creatio as we bring their innovative solutions to the large Indian marketplace.”

Creatio’s low-code platform also features robust CRM and business process management (BPM) tools to help organizations accelerate sales and marketing operations.

Creatio’s other interesting features include custom tools for seamless integration with third-party applications; visual analytics to detect bottlenecks and optimize processes; pre-built connectors and ready-to-use apps; and customizable dashboards.

“In today’s highly competitive business environment, more and more companies demand for intelligent solutions for CRM and business process management to help them streamline customer-facing processes and gain a genuine competitive advantage to boost profits and more effectively engage their customers,” said Alex Donchuk, global channel director at Creatio.

“With a strategic alliance of PositiveEdge Solutions and Creatio, more businesses worldwide will have an opportunity to benefit from the top-notch intelligent tools designed to streamline, orchestrate and accelerate key business processes.”

Goldman Sachs has invested £50 million into the digital unicorn Starling Bank, bringing the new total raised in the bank’s Series D funding round to £322 million.

The digital bank stated that the new funding will help its continued rapid and now profitable growth.

“Goldman Sachs will bring valuable insight as we continue with the expansion of lending in the UK, as well as our European expansion and anticipated M&A,” said Anne Boden, founder and CEO of the bank.

James Hayward, managing director at Goldman Sachs, called Starling one of the most innovative digital banks in the country that is addressing a deep market opportunity.

“We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential,” he said.

Starling Bank became the UK’s latest unicorn in March after becoming the 10th fintech firm to surpass the $1 billion mark. The £272 million funding round, which took it’s valuation up to £1.1 billion, was led by Fidelity Investments and included financial input from Qatar’s sovereign wealth fund.

The bank is one of the fastest-growing in the UK and has opened over two million accounts since it started in 2017. The company highlighted that this included over 300,000 small business accounts.

This comes after news that the UK government has established a special taskforce to explore the launch of a UK central bank digital currency (CBDC). The new state-backed currency would function alongside traditional currencies, allowing payments to be made using digital payments issued by the Bank of England.

The announcement arrived as part of a wider package of measures the government is set to introduce in order to boost the UK’s fintech and financial services industry. It will found a Centre for Finance, Innovation and Technology and also introduce the second phase of its Digital Sandbox where companies can test concepts that address climate change and sustainability-related issues.

Fintech company Car Capital has closed an $8.8 million Series A funding round that will enable it to launch its auto loan business across several states.

The Grapevine, Texas-based startup specializes in facilitating fast loan applications for car dealerships, promising a completely automated approval process and offering loans regardless of the customer's credit background.

A dealer submits a customer application through the company's Dealer Electric Auto Loan System (DEALS), which provides deal structures for all the cars on the dealer's lot. It shows the dealer's projected profit, enabling them to find the most profitable vehicle that is affordable for the customer.

Car Capital specifies no minimum number of deals, and it funds delinquent loans from a pool of loan capital. The company charges an upfront boarding fee and makes a 20% margin on the customer's loan payment. This opens up automated loan approvals to the subprime market.

"Anyone, no matter their credit situation, should be able to buy a car for personal transportation, particularly during these trying times,” said president and CEO Justin Tisler.

Tisler co-founded the company in January 2020. He comes from a financial background, having been managing director at US ABS Capital Markets and President of boutique advisory firm KentMoore Capital.

The funding round coincides with its official launch. It began rolling out the web portal-based service to a series of dealers in a beta test in mid-March and plans a larger deployment in the coming weeks, it said.

FM Capital led the funding round and was joined by over 50 individual and institutional investors, including Automotive Ventures and Medalist Partners.

Car Capital is currently licensed to operate in Florida, Georgia, Illinois, Indiana, Ohio, Oklahoma, Tennessee, and Texas according to its website. The funding round will help it expand to serve additional states in the future, it explained when announcing the launch.

Mastercard has announced new offerings to its US small business benefits suite to maximize SMBs’ digital presence.

Available across Mastercard BusinessCard and World Elite Mastercard for Business in the US, Mastercard’s enhanced suite of US small-business benefits now includes Microsoft, QuickBooks, and Zoho services.

“Now more than ever, having a digitally-led approach is critical for small business owners. Mastercard remains committed to helping provide small businesses the solutions required to meet the needs of the evolving consumer and operate in our digital world,” said Chiro Aikat, EVP of products and innovation in North America for Mastercard.

Casting light on the new services, Mastercard says its digital offerings and tools will help small business cardholders “sustain their business today and accelerate their growth tomorrow.”

Notable features of Mastercard’s expanded digital suite include Microsoft advertising for driving leads, appointments, visits, or purchases through paid search; QuickBooks Online Payroll management; and Zoho marketing capabilities for growing social media presence, running email campaigns, surveying customers, and more.

Mastercard has also announced enticing discounts on its new offerings. For instance, you can get $125 in advertising credit after spending only $10 with Microsoft Advertising, save 40% on QuickBooks Online Payroll for six months, and receive 50% off one year of Zoho Social.

Plus, Salesforce’s customer relationship management solution Salesforce Essentials, Intuit’s QuickBooks and TurboTax discounts, access to a 24/7 Business Assistant, Mastercard ID Theft Protection, Mastercard Easy Savings, and Mastercard Receipt Management are other interesting Mastercard partner discounts.

The services can be downloaded and activated for free using a valid Mastercard Small Business card in the Apple and Android app stores.

“Many businesses have experienced an accelerated digital transition this past year, and they are now exposed to an array of tools that can help them grow and promote their businesses across digital marketing channels—web, social, email, events and more," said Raju Vegesna, chief evangelist at Zoho.

"We are thrilled to partner with Mastercard to offer our social media management tool and end-to-end digital marketing platform—Zoho Social and Zoho Marketing Plus—so that small businesses can fast-track their growth.

Artificial intelligence (AI) and machine learning are the future. Meanwhile, cyber crime, money laundering and online financial fraud are becoming bigger problems by the day. To help combat these rising issues, fintech startup Feedzai has raised $200 million, pushing its value to over $1 billion.

Feedzai said it would use the money to expand its product range and speed up its global expansion. The money will also fund further research and development into artificial intelligence and machine learning and their potential to fight cyber crime.

“Feedzai was born to fight financial crime using advanced machine learning,” said company CEO and chairman Nuno Sebastiao. “We’re passionate about cutting-edge technology, artificial intelligence, and contributing to the end of human suffering caused by fraud and money laundering.”

Feedzai’s clients include major companies like Citigroup, Fiserv, Banco Santander, and SoFi. Feedzai says its customers include four of the five biggest banks in North America, 80% of Fortune 500 companies, and more than 150 million individual and business taxpayers in the US.

It’s no secret that cyber crime is rising. As the COVID-19 pandemic pushes more commerce online, the scale of digital payments and digital banking has boomed. This has caused banks and financial firms to look for state-of-the-art technology to prevent online crime.

Feedzai says its AI and machine learning systems are always “learning” from more data, making them continually more useful, versatile, and effective.

“When the challenges of the past year hit, we leaned on our ‘future-proof’ mantra, and it worked. We were ready for the rapid shift to a digital-first banking and commerce world,” Sebastiao said.

“This new investment delivers on our mission to keep commerce safe by further developing our single machine learning cloud platform for all four stages of the customer risk journey: prevention, detection, remediation, and compliance,” he added. “Focusing on the entirety of the risk life cycle allows us to partner with financial services in a radically new way at every step of the journey.”

Fintech firm Stripe has raised $600m in a funding round that places its value at $95 billion.

The move will fuel further expansion in Europe for the fast-growing company, which is increasingly targeting large enterprise customers.

The money came primarily from insurance companies Allianz and Axa, with other backers, including Baillie Gifford, Fidelity Management and Research Company, Sequoia Capital, and the Irish National Treasury Management Agency (NTMA).

The company has committed much of the funding to expand its European operations, where it already operates in 31 countries. Stripe launched support for companies in the Czech Republic, Romania, Bulgaria, Cyprus, and Malta, in May 2020. Ireland, where it has one of its dual headquarters, will be a focal point, according to its president and co-founder John Collison.

Outside Europe, Stripe will also expand operations in Brazil, India, Indonesia, Thailand, and the UAE.

Stripe will expand its Global Payments and Treasury Network (GPTN), the foundation for a range of services it’s been launching to capture greater parts of the payment chain. These include accepting and making payments and storing and managing them.

The company began focusing on smaller, startup-stage companies, providing them with a way to integrate payments easily into their applications. Over time, it’s expanded to court larger companies with a range of additional enterprise features.

In 2018, it added a set of anti-fraud tools called Radar. It also launched a platform for companies to issue Mastercard and Visa credit cards during the same year. In late 2020, it announced Stripe Treasury, a banking-as-a-service API2 that provides its clients' banking services. Initial partners for the service included Goldman Sachs and Evolve Bank in the US.

This latest fundraising follows a $250 million Series G funding round that Stripe started in September 2019 that put its value at $35 billion. It extended that round and included General Catalyst, Sequoia, and Andreesen Horowitz to raise another $600 million in April 2020.

London's Starling Bank is the UK's latest unicorn after becoming the 10th fintech firm in the country to surpass the $1 billion mark.

A fresh cash injection of £272 million from an investment round took Starling's valuation up to £1.1 billion ($1.5 billion) on Monday.

Starling's latest funding round was led by Fidelity Investments and included financial input from Qatar's sovereign wealth fund. According to business analytics firm CB Insights, the UK now has 10 fintech unicorns, including Monzo, Revolut, Wise (formally TransferWise) and local payment provider PPRO.

"Digital banking has reached a tipping point," Starling's CEO Anne Boden said in a statement. "Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services.

"Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence."

Starling has suggested that the new money will be used to expand into Europe and for some mergers and acquisitions. The milestone rounds off a very successful 12 months for the challenger bank, which has been boosted by rapid customer adoption and also government-backed loan schemes.

The London-based fintech startup saw an increase in lending activity in 2020 with £1 billion worth of loans on its balance sheet by the end of July, a figure that has now doubled to exceed £2 billion.

This was from the emergency loan scheme the UK's government had created in response to the first lockdown, which left many of the country's startups in financial trouble.

Additionally, the bank is one of the fastest-growing in the UK and has opened more than two million accounts since it started in 2017, with a new customer joining the bank every 39 seconds. This includes more than 300,000 small business accounts, the company said.

This article originally appeared in Issue 12 of IT Pro 20/20, available here. To receive each new issue in your inbox, click here.

In September, it was reported that the Royal Mint may stop making two pound and two pence coins for at least 10 years due to a glut of stock. This doesn’t mean these coins are being withdrawn. Indeed, it's more the case that there are far too many currently in circulation, so there’s no need to replace them. One of the main driving forces for this over the course of many years has been the rise of technologies such as contactless payment. Nevertheless, until recently many, if not most, people still used cash for at least some purchases. Thanks to the coronavirus pandemic, however, contactless payments, either by card or smartphone, has become the preferred way to pay for both consumers and sellers. Does this mean we could finally be on the cusp of becoming a cashless society?

Speaking to IT Pro, Sulabh Agarwal, global payments lead at Accenture says: “COVID-19 has accelerated the decline in cash, with usage in the UK dropping faster than anywhere else in Europe. We also expect this to drive significant adoption of contactless payments. Our recent global survey of consumers suggests the crisis will drive permanent change to consumer behaviour. However, we don’t expect cash to disappear altogether due to the need for financial inclusion of potentially vulnerable or unbanked people in society.”

This is a problem that has given other nations pause for thought. Other countries – notably Sweden and Denmark – have made great strides towards a cashless society, but even here, governments have slowed their initiatives for fear it may mean some members of their societies are unable to efficiently and cost-effectively manage their money.

Currency matters

For some groups, cash remains their primary payment method and any wholesale move to even a partial cashless society could have an adverse impact on them. Research in 2019 from Which? showed a sharp decline in the number of ATMs available, with one in 10 closing over the previous 17 months. This decline isn’t surprising, as the cash infrastructure across the UK costs the retail banks who run it around £5 billion a year. Reducing this cost is a clear driver behind the rise of cashless payments and a reduction in the access to cash.

The risk is that once the cash infrastructure is reduced or even removed, it's impossible to replace it. Sweden, which has one of the highest adoption rates of cashless payments, recognised the risks and has taken action to slow the trend until more research into the impact this could have on vulnerable groups can be done.

Mats Dillén, head of a Swedish parliamentary committee said: “We need to pause and think about whether this is good or bad, and not just sit back and let it happen. If cash disappears, that would be a big change, with major implications for society and the economy.”

Cash for the so-called ‘unbanked’ continues to be vital. According to the Fair4All Finance survey, there are over a million adults in the UK without a bank account, all of whom will rely on cash to receive and spend money.

The March 2019 report from Access to Cash Review also found that 17% of the UK population – over eight million adults – would struggle to cope in a cashless society. This report refuted the claim that older generations are the most likely to be impacted if cash as a payment mechanism rapidly declined. Instead, it found those who would be the most disadvantaged are people living in poverty.

Speaking to IT Pro, Natalie Ceeney, chair of the Access to Cash Review says: “If we don’t ensure there is a place for everyone in a new digital-only society, we could see the cashless debate develop into one that separates the ‘haves’ and the ‘have nots’. We are already seeing evidence of this throughout the pandemic as the most vulnerable in our society (typically those who are most reliant upon cash) are refused by shops when trying to purchase essential items with cash.

“Therefore, it’s more important than ever that FinTechs, challenger banks, regulators and consumer bodies all work together to develop digital solutions that won’t exclude anyone from a digital society. In the meantime, it’s critical we find ways to protect the viability of cash, for consumers and communities alike.”

Where people use cash is also a critical component to understand in the context of a cashless society. Figures from the Association of Convenience Stores’ 2018, 2019 and 2020 Local Shop Reports showed that 100% of its members accepted cash, and access to a cash machine is consistently rated as one of the most important services offered by this type of shop by customers. Indeed, while the number of free and fee-charging cash machines was steady through 2018 and 2019 – with 46% and 18% of shops offering them respectively – this figure rose in 2020 to 49% and 22%.

There are signs even here of the decline in cash, however. The number of local shops accepting non-cash payments has grown significantly, for example. In 2018, 94% accepted debit card payment, 88% accepted credit card payment, 80% accepted contactless payment, and 63% accepted mobile payment. By 2020, these figures had all increased, with the most significant increases being in contactless payments (88%) and mobile payments (80%). The response to the COVID-19 pandemic has also had an effect, with 69% of shops saying they were encouraging customers to use contactless over other forms of payment.

There are other disadvantages to cash transactions for businesses as well. Those that take cash payments, hold cash on their premises, and then need to deposit cash at their bank, face security concerns. The steady closure of bank branches across the UK has also made it harder to pay in or withdraw physical money.

A cashless future?

Developments in the FinTech sector, challenger banks, and the Open Banking initiative are all converging and cash could eventually fall out of use. To say its demise is imminent, however, is premature.

In a future cashless society, if payment systems failed or were subject to a cyber attack, it could cause chaos. This isn’t an entirely hypothetical prospect, either. The 2018 visa payment network outage caused over five million transactions to fail across Europe – and it only lasted 10 hours. When foreign exchange firm Travelex was taken out by a cyber attack in early 2020, those reliant on services such as payment cards were unable to access their money – branches and kiosks, however, were still able to provide cash. Going further back, the April 2007 cyber attack against Estonia saw bank servers targeted, which in turn brought down online banking services and left cash machines sporadically out of service as well. For a country that had prided itself on being at the forefront of the quest to become a digital society, it was a significant blow.

In light of this, going completely cashless would require robust security systems and infrastructure in place first to avoid outages.

“Digital innovations from FinTech players that have led to the change in consumer payments habits in turn have an impact on British culture and behaviours,” says Agarwal. “However, as the behaviour continues to change and adapt, this breeds further innovation from all kinds of organisations, whether that be challenger banks or incumbent financial services providers.”

“There is no doubt that cash usage in the UK will continue to decline and, as a result … banks, retailers and regulators are working together to assess the options available to continue to enable access to cash for both consumers and SMBs.”

Is cash still king? Perhaps in some business sectors, but change is fast approaching, accelerated by the pandemic. As our relationship with cash changes, and as the infrastructure that supports it erodes, the future of cash as a wide-spread payment mechanism is in doubt. But as we have consistently seen in the past, cash has a very strong survival instinct.

Welcome to the IT Pro Panel Profile, where we talk to the CIOs, experts and IT leaders that make up the IT Pro Panel, and discover their top tech, pet peeves and IT inspirations.

The UK’s fintech sector is one of the most dynamic and fast-moving industries in the country, and Yolt is one of the companies riding that wave. Initially established as a venture of banking giant ING, the app allows users to save and manage their money, as well as offering an enterprise-level open banking platform through its Yolt Technology Services arm.

Ensuring the stability, security performance of these services is Yolt CTO Roderick Simons, who has spearheaded projects including the company’s move to the cloud, the development of AI-driven services to add value to business clients, and the addition of new payment card services for retail banking customers.

Roderick Simons

CTO, Yolt

Describe your role in 20 words or fewer.

I’m the chief technology officer of the Yolt app and Yolt Technology Services.

What was your first computer?

My first computer was a PC with a 16MHz i386 CPU. I remember the days of having to run memmaker or manually changing the config.sys file in order to free up memory before starting a new program.

What do you like most about working in IT?

The most rewarding aspect for me is getting to build software with great teams that customers like to use. I still remember the first moment when I saw someone opening an app I helped to develop.

If you could magically get rid of one piece of technology forever, what would it be, and why?

I’d eliminate notifications or badges that keep popping up and that draw away our attention when we’re trying to get into a good flow.

What future tech innovations are you most excited about?

There’s two areas I'm excited about; firstly, I follow the developments that AI can bring in different areas with great interest, from helping companies make better-informed lending decisions, to using AI to better predict the cause of a software issue.

Secondly, due to DevOps and continuous delivery, we have seen an increase in the speed of delivery. Supporting tools are needed to allow the teams to remain in control. Therefore, I like the development of tools that enable the continuous compliance of IT assets by checking against a predefined list of acceptable configurations, or by using more advanced methods to detect irregular patterns in an IT landscape.

Who’s your biggest inspiration in the world of tech?

I think both Elon Musk and Bill Gates are having a big effect on tech in the wider world, both in the past and in the future. It shows the impact a single person can have, which is truly inspiring.

If you're a senior IT decision-maker and you'd like to apply to be part of the IT Pro Panel, please email panel@itpro.co.uk.

Banking is changing; the financial services industry is no more immune to digital transformation than any other sector, and new technologies like cloud platforms, APIs and continuous integration have allowed new challengers to emerge and old incumbents to revitalise their practices.

One company that’s helping transform money management is Yolt, an ING-backed startup that has recently added current accounts and contactless cards to its offering. In this week’s episode, we speak to Yolt CTO Roderick Simons to discuss the engineering challenges of this expansion, how the API economy has accelerated Yolt’s business, and why the future of banking is in the cloud.

Footnotes

• The future of business banking now
• What are biometrics?
• Only skin deep: The state of biometric security
• Fintech sector voices concern over future funding
• Banks and fintech firms using tech firms to fight deepfake fraud
• Remote working: Are you ready for the new normal?
• How do I best support my remote workers?
• What is DevOps?
• The IT Pro Podcast: DevOps for fun and profit
• What is open banking and why does it matter to your business?
• What Open Banking means for the security of our money
• The API economy: What your business needs to know

Subscribe

• Subscribe to The IT Pro Podcast on Apple Podcasts
• Subscribe to The IT Pro Podcast on Google Podcasts
• Subscribe to The IT Pro Podcast on Spotify
• Subscribe to the IT Pro newsletter
• Subscribe to IT Pro 20/20

Today, Finxact announced it’s adding two new fintech companies, Unqork and TransferWise, to its Finxact Marketplace. The Finxact Marketplace is a network of innovative fintech companies that provide banks with core banking options, including cloud technology, to help them keep up with today’s fast-changing banking industry.

TransferWise, a $5 billion fintech company, uses API to improve the way banks move money around the globe.

Abid Mumtaz, Global Head of TransferWise for Banks, said, "I'm excited to announce TransferWise's partnership with Finxact, a company that similarly values transparency. TransferWise ultimately wants to ensure that everyone has access to fast, cheap, and transparent international money exchange, and this partnership with Finxact is the next step in achieving this mission."

Unqork is a no-code platform that improves quality while lowering the cost of mission-critical application development. The company received a $2 billion valuation following a recent capital raise.

"Unqork's no-code platform was designed to support mission-critical applications in regulated industries like financial services, so joining the Finxact Marketplace makes perfect sense," said Brian Karimi-Pashaki, Director, Technology Partnerships & Marketplace, Unqork. "It's now easier than ever for Finxact customers to get started building the bank of the future with Unqork and, as a result, we are going to drive a lot of value in the industry."

The UK’s leading banks, including Barclays, HSBC, Lloyds Banking Group, NatWest Group, and Santander, have been announced as early voluntary signatories of a pledge which focuses on enhancing effective collaboration between banks and fintechs.

The Fintech Pledge, which is supported by Tech Nation, HM Treasury, and the Fintech Delivery Panel, aims to facilitate the UK’s economic recovery by establishing “efficient and transparent” commercial partnerships between fintech companies and banks.

Operating on a voluntary basis, the pledge’s signatories are required to adhere to the following principles:

• Provide clear guidance to technology firms on how the onboarding process works through a dedicated online landing page,
• Provide clarity to tech start-up firms on their progress through the onboarding process,
• Provide a named contact, guidance and feedback,
• Encourage good practice and improvement,
• Commit to implementing this process 6 months from signing this pledge and providing bi-annual feedback in the first year.

Tech Nation announced that it will name the signatories on its website as well as update the list quarterly, in conjunction with the Treasury’s Fintech team.

Economic secretary to the Treasury John Glen said that he welcomes the Fintech Pledge and looks forward to “more firms becoming signatories”.

"The UK is already the best place in the world to start and grow a fintech", he added. “We’re committed to that remaining the case as our economy bounces back".

Victoria Roberts, director of the Fintech Delivery Panel at Tech Nation, said that the Fintech Pledge “provides a welcome clarity, setting out clear commitments of what fintechs can expect and how best to create productive collaborations”.

“Building partnerships with established institutions is a fantastic route for fintechs to drive positive change in finance, be it underpinning new customer solutions or transforming regulatory reporting,” she added.

Despite being initiated with the five largest banks in the UK, the pledge will also be opened up to other banks following launch. All signatories are asked to provide a senior sponsor from within the institution, as well as a named person responsible for updating the Fintech Delivery Panel’s onboarding working group on the progress.

The Fintech Delivery Panel was launched in 2017 by Tech Nation, at the request of HM Treasury, and is a comprised of fintech industry experts from leading fintech startups, investors, and financial services institutions.

Financial tech firm Global Payments has agreed a partnership with Amazon Web Services (AWS) to expand its global reach with the development of a cloud-based payment platform for card issuers.

As part of the deal, Global Payments will also tap into AWS services as its preferred cloud provider.

The cloud-based platform is described as a "processing service" for card issuers. It aims to give companies more access to technology-oriented services that could help them to deliver more modern consumer experiences and help accelerate feature improvements.

Global Payments CEO Jeff Sloan told MarketWatch that it could "level the playing field for large financial institutions" suggesting that innovations such as contactless payment options and digital banking services "can all be done better, faster and cheaper in the cloud".

He added that the arrangement with AWS was about "letting large financial institutions globally access the same technology that startups did."

"The new platform's cloud-based architecture will give clients the ability to use the services they need with greater speed-to-market, flexibility and best-in-class experiences for our customers and their cardholders," said Sloan.

"By strategically partnering with AWS, we can capitalise on the fintech and open banking movement, further expand our role in technology innovation, leapfrog existing distribution models and solidify our position as a leading provider of technology solutions for financial institutions, new market entrants, and retailers across the globe."

Global Payments will use a range of AWS services, such as storage, compute, database, security, analytics and machine learning to fulfil compliance requirements, enable new cloud-based services, and enhance customer experiences.

The two organisations will also work together to explore additional opportunities for collaboration on innovative payments products and services across all of Global Payments.

The partnership is another big win for AWS in the financial world. The company already works with CapitalOne, CoinBase and the National Bank of Canada, to name a few.

Paya, an integrated payments and commerce solution provider, announced today a deal to merge with acquisition company FinTech III.

The combined companies will operate as Paya and will be listed on NASDAQ under the new symbol PAYA. The merger reflects an implied value of $1.3 billion.

Per the announcement, Paya CEO Jeff Hack will continue to lead the company. Paya’s existing majority equity holder GTCR will also remain as Paya’s largest stockholder.

Paya processes over $30 billion in electronic payments for over 100,000 customers and is the largest independent pure-play provider in the rapidly growing integrated payments space.

Paya partners with software providers through Paya Connect, its proprietary card and ACH platform, and provides tailored payment solutions to B2B, healthcare, government and utilities customers, and non-profit markets.

According to Hack: “Paya has a long and proven history of creating differentiated value for software integration partners and their end customers.”

“As a publicly listed company, we will continue to invest in the product innovation and support our software partners rely on to meet the needs of their clients, as well as have access to capital for additional strategic acquisitions,” Hack continued.

Betsy Z. Cohen, chairman of FinTech III’s board of directors added: “Integrating payment solutions with software is the fastest growing segment of the payments industry and Paya is perfectly positioned as the partner of choice for sophisticated software providers and middle market business clients across multiple attractive verticals.”

To acquire an existing company, special-purpose acquisition companies (SPACs) like FinTech III raise capital through an initial public offering (IPO). As a result of the deal, the acquired company then goes public. FinTech Acquisition III is the third SPAC founded by investor Daniel Cohen and raised an impressive $345 million in its November 2018 IPO.

The Paya and FinTech III merger is expected to close in the fourth quarter.

ComplyAdvantage, a tech company transforming financial crime detection, has raised $50 million in a recent Series C funding round. The fundraising brings the total investment to date in the company to $88 million.

Ontario Teachers’ Pension Plan Board (Ontario Teachers’) led the funding, but existing investors Index Ventures and Balderton Capital also participated. The $50 million investment will assist the ComplyAdvantage product and market expansion throughout the US, Europe and Asia-Pacific region.

Using machine learning and natural language processing, ComplyAdvantage helps regulated organizations manage risk obligations and prevent financial crimes. To do so, the company’s proprietary database leverages millions of data points to provide real-time insights across sanctions, watchlists, politically exposed persons and negative news.

By reducing dependence on manual review processes and legacy databases by up to 80%, ComplyAdvantage improves how companies screen and monitor clients and transactions.

“ComplyAdvantage offers mission-critical technology solutions for combating financial crime and keeping pace with an ever-evolving regulatory landscape,” said Olivia Steedman, senior managing director, TIP, at Ontario Teachers’.

“The company is well-positioned to continue its rapid growth as its powerful technology platform transforms the compliance and risk management process for its clients,” Steedman added.

The Ontario Teachers’ is one of the world’s largest pension plans with 207.4 billion Canadian dollars ($155.17 billion) in net assets and focuses on late-stage venture and growth equity investments in companies using disruptive technology.

Charles Delingpole, founder and CEO of ComplyAdvantage, said of the investment: “Ontario Teachers’ takes a long view of investing that is genuinely aligned with our own vision at ComplyAdvantage to transform how companies mitigate risk. This funding allows us to accelerate the development of our industry-leading data and suite of products to serve institutions with diverse clients and complex risk exposure.”

ComplyAdvantage has offices in New York, New York; London, England; Singapore; and Cluj-Napoca, Romania. To date, more than 500 enterprises in 75 countries rely on ComplyAdvantage’s technology to prevent financial crimes.

Mastercard announced today it will acquire Finicity in an $825 million deal.

According to Mastercard, Finicity's existing shareholders could also earn an additional $160 million if performance targets are met. The acquisition of Finicity will help Mastercard as it advances its open banking services.

Finicity will help Mastercard as it strengthens its open banking services by allowing its customers to determine how and where fintechs or banks can access information to provide money-management services or initiate payments on their behalf.

In the past, Finicity has partnered with major financial institutions like Wells Fargo, Fidelity Investments, Capital One and JPMorgan Chase.

Once the acquisition is finalized, the combination of Mastercard’s existing technology with Finicity’s new analytics platforms will also help streamline the credit-decision process for consumers and small businesses. The integration of Finicity’s account owner verification tools to Mastercard’s New Payment Platform capabilities is expected to deliver an improved ACH and real-time payment experience as well.

“Open banking is a growing global trend and a strategically important space for us. With the addition of Finicity, we expect to not only advance our open banking strategy, but enhance how we support and accelerate today’s digital economy across several markets,” said Michael Miebach, president of Mastercard.

Steve Smith, CEO and co-founder of Finicity added: “Enabling people to access and control their data, while ensuring best practices to protect that data, will continue to drive tremendous innovation that increases financial literacy, inclusion and health. This partnership with Mastercard helps us accelerate this mission globally.”

Mastercard has invested in the open banking space for many years and, in 2019, launched comprehensive open banking solutions across Europe. The combination of these efforts, along with Finicity powering platforms like Quicken Loans Rocket Mortgage and Experian Boost, has the potential to “shape the next generation of open banking services,” says Mastercard.

Mastercard anticipates closing the deal with Finicity by year’s end and doesn’t expect the acquisition to dilute its business for more than 24 months.

M1 Finance announced it’s raised $33 million in a Series B funding round. It will use the funds to accelerate its growth. The funding round was led by Left Lane Capital with Jump Capital and Clocktower Technology Ventures also participating in the round alongside M1’s existing investors.

This funding round marks another milestone in what’s already been a strong year for M1. In February, the company became one of the few fintech startups to reach $1 billion in customer assets. M1 has also added more than $650 million in customer deposits in 2020. Having raised $21.5 million in funding prior to this Series B funding round, M1 was able to reach the $1 billion AUM threshold faster than many other fintech companies.

“Our clients are intelligent, self-directed investors building long-term, sustainable wealth. We want that to be as easy and automated as possible, while still letting our clients maintain the control they desire,” said M1 founder and CEO Brian Barnes. “With M1, you can build an entire wealth strategy in only a few clicks, down to individual stocks and ETFs. We take it from there, handling all the day-to-day optimization, rebalancing, and re-investing according to your instructions so you can spend more time building strategies and less time executing them.”

“We’ve built the premier personal finance platform that combines the best of digital investing, borrowing, and banking, and have done so on relatively little funding,” Barnes added in a statement.

Prior to the launch of M1, self-directed investors had to use a mix of brokers, money management apps and banks to manage their personal finances. With M1, investors can use the platform to build their wealth, meet their financial needs and manage short-term spending.

“Consumers are highly selective when choosing an investing platform,” Dan Ahrens, Partner at Left Lane Capital, shared. “The fact that M1 has reached this scale organically, relying mostly on word-of-mouth to grow rather than paid marketing, shows the strength of M1’s product and client relationships.”

Founded in 2015 by Brian Barnes, M1 has now raised a total of $54.5 million in funding.

Forget walking down the high street to queue at your bank branch to set up an account, make a deposit or do any other basics of business banking. Thanks to the rise of mobile and online banking, such tasks can be done with a few taps on a smartphone between meetings. But the future of business banking isn’t just digital – it’s about integrated services and linking up with third-party software to make your finances as streamlined as possible.

That’s the idea behind open banking, which is a set of regulations that lets your financial data be shared, opening up the way for new services and apps. Indeed, it’s helped spark the rise of so-called “challenger” banks, which are normally digital only, each with intuitive apps, near-instant account setup and handy features such as instant notifications and automated roundups for saving pots.

The likes of Starling, Monzo, Revolut and N26 are now firmly established in the UK, shaking up the sector by focusing on customer service, low fees and personalisation. They're particularly popular with millennials; a recent survey of 2,000 UK consumers, commissioned by digital banking hub CREALOGIX, found that 1 in 4 under 37s are using digital-only challenger banks, while 14% of UK bank customers spanning all ages have at least one mobile-only digital banking provider. Moreover, up to a third of under 37s said that they have at least two accounts with challenger banks.

But as compelling as they are, these banks started their push into the world of finance via consumer accounts for individuals, leaving small businesses behind.

That’s no longer the case. Starling has signed 155,000 businesses (and has surpassed 1.4 million consumer users), Tide passed the 100,000 mark last summer and Monzo’s business accounts arrived in March 2020. This, Starling has raised £100 million in funding to boost growth and reportedly holds £2.4 billion in its deposit base. “This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever,” said Anne Boden, founder and chief executive of Starling Bank.

Traditional banks have also caught on and don’t want to lose their lucrative business clients to newcomers, unveiling their own take on the challenger bank idea with the like of Bó from RBS – think big brewers releasing their take on a craft beer. Whichever you choose, it means same-day account setup, easy-to-use apps, and integrated accounting and other software tools.

SMBs long ignored

It’s high time banks paid better attention to SMBs. According to analyst firm EY, SMBs account for £1.9 trillion in turnover annually and make up 99% of private companies in the UK. But a survey from Adaptive Lab suggested SMBs feel undervalued by larger banks, with too high costs for not enough specialised services. No wonder then that British startup Starling decided early on to target SMBs. “We recognised it was an underserved segment of the market, where the incumbent banks dominate and where there hadn’t been much innovation,” says Alex Frean, head of corporate affairs at Starling. “We thought there was a real customer need out there.”

Oliver Prill, CEO of business challenger bank Tide, adds that his fintech startup started because the co-founders had previously gone through the difficulty of setting up a business bank account themselves. “It didn’t work smoothly,” he says. “The biggest motivation for switchers at the moment is the huge annoyance they have had with the big five banks… they’ve really had it with their bank.”

Why have incumbent banks failed to offer such services? “We come from a history of monolithic universal banks, where small business is one segment among many others without much mindset to look at it any differently,” Prill says. “We fundamentally believe that these are very different industries,” he continues, suggesting that one bank may not be able to serve consumers, corporations, sole traders and SMBs very well, let alone those operating across different industries.

All this means that business banking is ripe for disruption – and the disruptors are at the gate. They’re helped by the rise of digital in SMBs and API-led fintechs, open banking regulations prising data out of incumbents, and also the Alternative Remedies Package, which means there’s money sloshing around to help boost fintech startups. And, so far at least, it appears to be working.

Making the move

That said, despite the increasing options, a June 2019 survey from Accenture suggests a mere 15% of SMB customers intend to switch their bank in the next year, with only 25% saying they would be willing to move to a digital-only service.

There are two types of customer that challenger banks need to convince: those starting new businesses and those switching from an existing company to a different financial provider. For Tide, about 70% of its customers are new-to-market, and 30% are switching. To win over the first tranche, challenger banks need better awareness, admits Prill. He says Tide opens 12% of all new business current accounts, but its own in-house research suggests there’s only brand awareness among 17% of new companies – that’s why Tide ads are plastered all over London at the moment. “For the new-to market, a bank has to be fast… and have a good reputation,” he says.

“But you need to be aware of the bank in the first place.” Frean agrees, noting that the lack of high street banks means creating awareness is a challenge. “We have to go and find customers and make them aware of us,” she says.

And then there are switchers, those annoyed at their current banks. It’s not easy to switch, but open banking is making it easier. For consumers, trying out Monzo or Starling is easy: sign up for an account, order a card, install the app, and you can see if it’s a system you like without having your salary paid in or transferring over all your direct debits. It’s more difficult for businesses to try out a new bank fully, as switching everything over takes time and, therefore, money; you would have to be sure of a new service before taking the plunge.

To help, Tide wants to set up a system for trial switching, in which all your figures, transactions and so on are pulled into the Tide account as a data feed, with your existing account staying the same. That lets companies try a bank effortlessly without much risk. “The trial switching overcomes friction, but you need to have a real reason to switch,” Prill says.

Worth the switch?

Alongside attractive apps with whizzy features, challenger banks are trying to convince SMBs to make the switch by helping with or even taking over admin such as payroll and accounting, either offering such services or software themselves or via a third-party provider. “It’s really around saving small businesses time,” explains Prill. “We look at the space not as business banking, but as everything a business owner would consider admin and finance.” Indeed, Tide sees itself not as a bank, but instead as a platform, letting others build products that SMBs can embed into their banking processes. “We want to be the operating system for an SMB, but not the application layer,” Prill says.

And that’s where open banking and third-party partnerships come in. Rather than export transactions and then import them into your software of choice, tools such as Xero and FreeAgent are integrated into the app. When the right tool isn’t available, Tide builds one; so far, it’s created built-in systems for invoices as well as credit. Take invoicing, for example: an SMB needs to create, send and chase that invoice, noting when it’s paid and pushing the relevant information into an accounting system. “Across these different product sets – invoicing, credit, payments, accounting – is a connectivity chain that we orchestrate, we make it highly usable,” says Prill.

Starling’s equivalent is the Marketplace. This is the epitome of the open banking idea, a digital library of services and tools that Starling customers can easily integrate with their account, from receipt tracking to lines of credit, as well as leading accountancy software Xero and FreeAgent. “They can immediately pull your files from your Starling account and populate your accountancy files,” Frean says. “We’re adding to the Marketplace all the time.” Of course, some of the key features aren’t high-tech. Starling and Tide offer cash deposits via the Post Office, with Frean noting that it’s one of Starling’s most popular features.

What’s next?

Prill predicts the banking market will fragment even further, particularly for businesses. Rather than choose the best of few options from five or so big banks, we’re already seeing more competition from the likes of Tide, Starling and the rest. “In the long term, there will be many different models to suit different customer needs,” he says. “We think this is a sign of a healthy market, that there is not a monolithic culture but offering true choice."

Such banks will become less about your finances, and more about all aspects of your company – that’s Tide’s idea with the “OS for SMBs” concept. Right now, invoices and accounting are built into challenger business accounts, but within the next several months, Tide plans to also offer company formations. “The data we collect to set you up with a bank account… we might as well set up the company for you,” Prill says. “We could register your domain and website for you too.

“I think we’ll continue to see traditional banking providers lose share,” Prill adds, promising more richness of services, as well as more variety – and that’s where artificial intelligence (AI) could come in, he suggests, with machine learning used to find and suggest the best services for your business from a multitude. So many features and services that small-to-medium sized businesses need help choosing between them? That’s a nice change from which of the five boring banks will stash your money.

FreshBooks is a Canadian cloud accounting suite that dedicates itself to serving freelancers, sole traders, microbusinesses and growing small businesses. It's designed to be easy to use, without the clutter of features that are only needed by larger enterprises.

Instead, it focuses on capabilities commonly used by small businesses, from standard invoicing and expenses to time tracking and project management. There are three set subscription tiers, plus a top-end custom priced tier for businesses with more than 500 clients.

Priced at $15 USD per month - 11.47 - the Lite tier gives you five billable clients, unlimited invoices and expenses, time tracking, reports and estimates, among other features. Be aware though, that it lacks user-accessible double-entry accounting reports.

For those, you'll need the $25 (19.11) per month Plus tier, which also includes detailed customer proposal templates, recurring invoices and late fee handling. It supports up to 50 billable clients and is the best tier for most freelance service providers.

If your customer base grows beyond that, the Premium tier supports up to 500 clients and costs $50 (38.22) per month. Extra team members can be added to any account for $10 (7.64) per person and all tiers allow you to give your accountant access to your books free of charge.

Unfortunately, none of the tiers include support for submitting UK self-assessment tax returns or PAYE for your employees.

FreshBooks review: Getting started

Whatever tier you subscribe to, you'll be given the option of using FreshBooks or legacy FreshBooks Classic. While the latter is more comfortable for long-time users, its focus is primarily on invoicing and it lacks features such as a proper double-entry ledger and accessible Chart Of Accounts. Our review looks exclusively at the current edition of the service.

During a short guided setup process, you're prompted to add your company's details, customise the appearance of your invoices and test the service's email-based invoicing system. Invoices are made available online to clients, who can print them to paper or PDF or - if you've added a payment provider - pay directly online.

With that done, you're left with your dashboard page, capable of providing an overview of revenue, spending, profit and time. But you'll need to create some invoices before it has anything to show you.

FreshBooks review: Clients, invoicing, estimates and expenses

It's generally very obvious where to find everything in FreshBooks, but we'd have nonetheless appreciated more of a guided setup process, particularly for users with existing data to import. You can bulk import clients from contact data files in CSV format. Address handling is a little odd, in that only a single street address line is shown in your client records. However, pasted carriage returns within addresses are recognised and accurately reproduced on invoices.

You can also add clients directly from the invoice creation interface, where you can also customise invoice numbers - future invoices automatically increment on any numbering pattern. You can also invoice in foreign currencies, create recurring invoices, specify taxes, request deposits and add discounts.

Clicking into the due date field allows you to set the invoice as due on receipt or on net 30, net 15 or custom terms. These will be inherited by any future invoices you create.

As well as sending them via email or shareable link, invoices can be printed, downloaded and marked as sent, for customers who prefer to receive physical paperwork. You can also mark them as paid when you receive payment.

FreshBooks automatically keeps track of your balances in any currency you start working in, in addition to the base currency defined in your company profile. You can also choose which currency to see in the summary graphs on your Dashboard screen.

When you select the Invoices pane, an Other Income tab will become visible below its navigation bar entry on the right. This allows you to enter income in a number of different categories above and beyond direct invoicing. Note that you must provide customers with invoices and bills in compliance with the legal status of your company, even for cash transactions, and you must retain relevant documentation relating to cash sales, royalties, advertising income and online sales carried out on your behalf by third parties.

As well as invoices, FreshBooks can create estimates and - at its higher subscription tiers - detailed proposals describing the exact nature of the services or project plan you're offering to a client. Once created, these can easily be converted into invoices if your client accepts the estimates, and proposals have digital signature support, to create a permanent record showing that your client has approved the suggested plan.

Expenses can be added one-by-one, or in bulk via a CSV template. You can add an image of a receipt to go with each expense entry, although we'd have liked PDF support here, as well. Once again, you can work in any currency you like and mark it expenses as recurring - helpful for subscriptions and instalment purchases.

You can also tag the expense as Cost of Goods Sold to for more accurate profit and loss tracking, or directly assign it to a client - with or without a markup - if it's something you've purchased to sell directly or include in the costs of a larger project.

FreshBooks review: Banking and accounting

Expenses can also be added from imported bank statements and linked bank accounts. Direct bank account linking is a relatively new feature for FreshBooks, as is bank account reconciliation in general.

To access the bank connection beta, go to the Accounting pane and click the Connect My Bank button. All the major UK high street banks are supported, alongside many foreign banks and some digital-only services, such as Revolut, although as with most accounting software, Starling, Monzo, TransferWise and Shine are all conspicuous by their absence.

Unfortunately, if your bank isn't supported, then there's no way to manually add it or upload statements. FreshBooks plans to implement this in the future but doesn't currently have a concrete date for the feature's introduction.

The reconciliation tool - available to Plus and Premium customers - will attempt to automatically match bank activity to your invoices and expenses, and appropriately classify other transactions by category. There were a few misses when it came to automatic transaction identification, but it's easy to reclassify items and create new COA categories on the fly.

The Accounting section also gives you access to your Chart Of Accounts, balance sheet, profit and loss reports and other tools to help you ensure the accuracy of your accounts. The Reports tab provides further helpful summaries of invoices, expenses and more.

FreshBooks review: Projects, time and tax

Project management and time tracking tools are built into FreshBooks. When you create a project, you're prompted to select whether it's to be billed at a flat rate or by the hour.

You can categorise different tasks that will be involved in your projects, or create new ones when you enter work time. Time can be logged for either kind of project, allowing you to see how many working hours go into flat rate projects to help assess their efficiency and profitability. You can also generate invoices directly from the time tracking page for projects that are billed hourly.

FreshBooks is compliant with HMRC's Making Tax Digital scheme, via a bridging application created by 1 Click Accounts. Although the UK VAT return option is a little buried in the Reports section of the web interface, the bridging tool is neatly embedded into FreshBooks, with consistent branding and a clear guide to using it. As well as your FreshBooks and HMRC logins, you'll also need to create an account for the bridging tool. Once set up and linked, however, the process is a matter of just a few clicks.

FreshBooks has no payroll support, which in turn means no support for PAYE, pensions or other employee benefits. Gusto, the only payroll suite currently supported as a FreshBooks integration, is only available for US customers, while another supported external option, Payroll Evolution, is restricted to Canada. You can simply create appropriate COA classifications for staff wages and contributions, but you'll have to manage them using entirely separate software.

FreshBooks review: Mobile apps & integrations

A wide range of integrations are available, from e-commerce platforms such as Shopify to CRM including SalesForce and Capsule, integrations with G-Suite for contact syncing, and payment services like Stripe.

FreshBooks apps are available for Android and iOS, providing a streamlined mobile experience for invoicing, quote generation and expense tracking on the move. You can also get an overview of your account, track time and create full proposals using the app. A separate app is available for legacy FreshBooks Classic users.

FreshBooks review: Verdict

FreshBooks provides a genuinely easy-to-use accounting experience for small businesses, and is particularly well designed for businesses and individuals who provide services.

FreshBooks support HMRC's Making Tax Digital scheme, but UK businesses with employees will have to look elsewhere for payroll and PAYE, as payroll integrations are only available for the US and Canada. Additionally, if you use a bank that isn't supported by the service's linking tool, there's also no way of manually adding it or uploading statements.

If you have only a handful of clients, FreshBooks' Lite tier is competitively priced. However, it's ultimately less flexible and less suitable for freelancers and growing small businesses than key rival FreeAgent.

Verdict

FreshBooks packs in plenty of features, but although it supports Making Tax Digital, it lacks support for other UK tax filings and its cheapest tier places harsh restrictions on client numbers.

One of the few cloud-based accounting suites based in the UK, with data centres located in England, FreeAgent focuses on providing services to small limited companies, partnerships and sole traders. It's fully equipped to handle both HMRC's new Making Tax Digital platform for VAT payments, as well as PAYE, pension auto-enrolment and national insurance payments.

Charities can select the Universal version of FreeAgent, but those with paid staff should note that this doesn't include an HMRC-compliant payroll feature or UK VAT filing.

FreeAgent offers a variety of different pricing tiers. For most of the world, it only shows a single tier, priced at $20 (15.29) per month and covering any company structure you select. For UK users, however, pricing is more granular, a little more expensive, and includes specialist tools and tax filing features appropriate to your company structure.

Sole traders pay 19 per month (exc VAT) and get self-assessment features. Partnerships are charged 24 per month (exc VAT) and get profit share calculation features but partners currently have no self-assessment capabilities. Limited companies are charged 29 per month (exc VAT) and get access to self-assessment filing for directors, dividend vouchers and corporation tax forecasting.

New users get six months at half price and discounts are available if you pay annually, rather than on a rolling monthly subscription.

All tiers include Making Tax Digital-compliant VAT filing, multi-currency invoicing and unlimited users, clients and projects, and all FreeAgent users also get a gigabyte of file storage - with a maximum file size of 5MB - to help keep track of important documents and records.

FreeAgent review: Setup and configuration

After signing up, you're prompted to confirm your business type. It's important to get this right as it can't be changed later, and key features offered and calculations made by FreeAgent depend on this selection. The options for UK businesses are Sole Trader, Partnership, Limited Liability Company and Limited Company. Sole Traders and Partnerships can draw dividends, Limited Companies and LLCs get payroll and pension features, and all of them can file VAT if appropriately registered.

As well as a start date and tax year date for your business, you're prompted to include details of the bank account you use for your business from the very beginning. All you have to do here is give the account a name, enter the bank's name, your account number and sort code and your opening balance as of your FreeAgent start date. Later, you'll be able to set up direct feeds for supported banks.

With that done, you're presented with a checklist to help you customise and get familiar with FreeAgent. The guide takes you through customising and sending invoices, recording expenses, linking bank accounts so that transaction data is automatically imported, and using FreeAgent's projects feature. Items are ticked off as you work through the list.

FreeAgent review: Clients and Invoicing

If, as suggested, you jump straight into creating your first invoice, you'll be prompted to enter the name of your client and an invoice reference number, which by default will become the starting point for a sequential numbering system used by all invoices, although you can also have individual number sequences for specific clients and projects.

You'll specify the date, payment terms in days, currency and any additional text you wish to add to the bottom of the invoice. You can also set a default text to appear on all invoices. Further options allow you to add discounts, select the applicable VAT region, customise payment terms and contact information for specific invoices and customers, display project names, company logos and banking details as required.

Invoices can be emailed out, but you'll first have to confirm your email address and create a template email. FreeAgent has a surprisingly powerful set of macro commands that you can use to insert invoice data into your email. The same template creation tool can be used to email estimates to clients, as well as automatic reminders for imminent, due or overdue invoices and thank you notes when they're marked as paid.

With that done, you're taken to the invoice itself where you can itemise what you're charging for as products, services, blocks of time, projects and more. From here, links allow you to further customise your invoice and contact information, change the invoice's theme, save the invoice as a PDF for printing, send it by email, or use it to create a recurring invoice to make it easy to bill for subscriptions and rolling contracts. You can also configure online payment handling via PayPal, Stripe and GoCardless.

The only thing you'll need to create a contact is a name for the client and an email address if you plan on invoicing them electronically. However, it's a good idea to populate your contact book with as much data as you need for your clients and suppliers on a day-to-day basis.

FreeAgent's Contacts screen allows you to manually add full details and per-contact invoicing preferences or import contacts from a wide range of other sources, including Gmail or G-Suite, Outlook, your Apple contacts book and rival accounting service FreshBooks.

Invoices and estimates, alongside other key billing and tracking tools, can be found beneath the Work tab at the top of FreeAgent's reassuringly consistent interface, and are among the data summarised on the main overview screen.

FreeAgent review: Bills, expenses and payroll

FreeAgent provides businesses of all sizes with tools for logging expenses, bills and other payments. How that appears will depend on the kind of businesses you've set up.

Sole traders just have a single Expenses tab, where they can register payments made on a personal card on behalf of the business or log road vehicle mileage to reclaim VAT on fuel costs. You can attach receipt images, add descriptions, make the expense recurring and link it to a project.

Larger firms instead get a tab labelled My Money, with pull-down options for Expenses, Dividends, Salary and Payroll. A lot of careful design has been invested to help people who run small limited companies keep clear boundaries between the business's money and their own.

The Bills tab appears for all kinds of businesses, and covers anything that you get an invoice for but don't have to pay immediately, allowing you to keep track of exactly when you'll have to pay them. For items that are paid immediately or via recurring direct debit, FreeAgent instead recommends simply assigning outgoings to appropriate categories as they appear in your bank statements.

FreeAgent review: Banks and accounting

FreeAgent can link to your bank accounts to automatically import your transaction history. The usual range of UK high street and business banks is supported via Yodlee, as are major international banks.

Once connected, all transactions will be imported so you can easily reconcile them against invoices and assign outgoings to appropriate categories on your chart of accounts.

However, almost none of the most recent online-only challenger banks are represented. Although there's a dedicated integration to add support for Revolut accounts, we had no luck searching for Shine, Monzo or TransferWise. Fortunately for businesses that use such banks, or those who'd rather not use online linking tools, you can click past the initial "link your account" screen shown in the Banking tab and simply upload bank statements.

Statement uploads in OFX, QBO and QIF formats are fully supported, as are a few banks' CSV files. For others, you'll have to manually reformat the files, removing all column header rows and all columns apart from date, transaction and description. While we'd have liked to see integrated column selection, it's still a big step up from accounting suites that only support direct bank linking.

You can create as many accounts as you need, in whatever currencies you use, with separate account types for standard bank accounts, PayPal accounts and credit cards.

FreeAgent can also be instructed to try to automatically assign transactions to the most relevant category in your Chart of Accounts if you enable the "guess bank transactions" feature, which learns and improves its accuracy based on transactions you manually categorise.

Account reconciliation is a smooth process with pull-down menu options and COA categories for most transaction types you're likely to encounter, from sales and refunds to inter-account transfers. Some, however, you'll have to first create a COA category for - we had to do this when entering income from royalty payments.

You can add new categories, via the Accounting, Tax & VAT section of FreeAgent's settings, and can view the status of all active COA categories, along with numerous other reports, under the Accounting tab in FreeAgent's main navigation bar.

Because it's designed to suit any business, FreeAgent is absolutely jam-packed with features. There's basic stock control that lets you keep track of sales, purchases and quantities of items for sales-based companies and project management with time tracking that allows you to bill at pre-agreed hourly rates, with optional time and currency budgets.

FreeAgent review: Tax and payroll

The tax and payroll options available to you with FreeAgent depend entirely on the kind of business you run. Everyone who's VAT-registered gets access to UK VAT filing via HMRC's new Making Tax Digital portal - after you've connected FreeAgent to your MTD portal account and set up your VAT return periods, you can submit your filings with just a couple of clicks. An on-screen guide helps you through the initial connection process.

If you make relevant digital sales to European customers, you can also tag items that fall under the EU's VAT MOSS scheme to make it easier to tot up figures for European VAT filings.

Sole traders and company directors get an excellent self-assessment interface for their tax returns and larger businesses get an integrated payroll module that, once configured, automatically submits to HMRC, with support for student loans, parental leave and employment allowance. FreeAgent also supports the Construction Industry Scheme for subcontractors.

FreeAgent review: Apps and integrations

A range of integrations for third-party services are available, split between the settings page and a dedicated add-ons shop. There's support for a range of online payment systems, project management tools like Basecamp, plus CRMs such as Capsule and receipt processing services including Receipt Bank and Rydoo.

The obligatory mobile app has support for the invoicing, time tracking, client logging and expense tracking on the move. It also gives you a wide range of account management and reporting features, including an overview of your tax filings and bank transaction reconciliation.

FreeAgent review: Verdict

We love the clarity of FreeAgent's UK tier structure. While many rival's cheaper tiers restrict the number of invoices or active clients you can have, or can't combine MTD with self-assessment, FreeAgent gives you everything your businesses can legally take advantage of, with no other restrictions.

It's a little more expensive than rivals such as FreshBooks and QuickBooks but for VAT-registered small businesses, the features FreeAgent provides mean that you'll never outgrow your accounting software and you won't have to pay for extra bolt-ons.

Its interface and documentation are also excellent and we were very pleased to find that FreeAgent, almost uniquely, uses UK data centres. For UK businesses, that all adds up to a package that wins over bigger names like Sage and Xero.

Verdict

With full support for digital tax filing with HMRC and feature tiers that are based solely on the legal requirements for British businesses, FreeAgent isn't the cheapest service around - but it's an ideal accounting tool for UK-based small businesses.

The financial services sector, once one of the most stable and slow-moving industries in the world, is currently in the middle of a vast upheaval. A status quo which has remained largely unchanged for decades if not longer is being turned on its head, and it's all thanks to fintech.

Fintech (or financial technology) has undergone an explosion in recent years. Widespread connectivity and the growing ubiquity of mobile devices have enabled an unprecedented growth in the number, sophistication and accessibility of fintech tools and services, and it's having a noticeable impact on the financial services sector.

These tools have allowed new digital-native companies to disrupt the market, as well as letting existing companies bolster their offerings with an increased range of financial services. Digital-only challenger banks' like Monzo, Starling and Revolut, for example, have started drawing customers away from traditional consumer banking firms, and mobile-based trading platforms have opened up the stock market to everyday people who otherwise would never have considered buying shares.

Established financial institutions are now having to rethink how they operate in light of these new developments. Customers are demanding faster, more convenient and more secure experiences from their financial providers, and many are choosing to ditch their existing banks when they don't meet these new, evolving standards.

It's not hard to see why; the new capabilities being unlocked by emerging fintech are very attractive. The combination of AI-driven chatbots and advanced data analytics allow customers to have 24/7 access to their own personal financial adviser who can give them insights into their personal spending patterns. Moreover, it can help them set and control their budgets, while a digital-only bank means no longer having to make inconvenient in-branch appointments to manage your money.

Fintech offers the key to increasing customer loyalty and satisfaction, but having the right technology is key. Even if you introduce the kind of advanced features that customers demand from their financial service providers, a poor experience thanks to long wait times, dodgy security or frequent errors is just as likely to drive them away as not having them in the first place.

So how can you ensure that your fintech tools are speedy and reliable enough to keep up with your users' needs? Many businesses in other sectors have turned to the cloud for this, but in many cases, compliance and regulatory issues will mean that financial services companies simply aren't able to enlist the services of a public cloud provider like Google, Microsoft or Amazon.

Instead, financial firms should be looking to modernise their own in-house data centres. Extra investment in data centre transformation projects can pay dividends for the performance of financial applications in particular, such as data analytics. The bedrock of any modern business strategy, data analytics is especially essential for financial services, allowing organisations to rapidly analyse market trends and real-time transaction data, as well as their customers' banking information in order to provide them with new insights into their finances.

In order for this to be effective, however, your analytics model needs to perform at lightning speed, crunching through your datasets as quickly as possible to ensure your business retains a competitive edge. Similarly, you need to ensure that transactions and transfers are processed as quickly as possible; there's nothing more frustrating for a customer than having to wait hours or even days before the money that a friend sent over for their share of a bill arrives in their account.

Achieving this is no mean feat, however, and it's not just about adding more racks to your data centre. Making sure your data centre is running on the right infrastructure can be at least as important as its size, if not more so. Intel's Xeon Scalable platform, for example, is built specifically to support the kind of high-intensity data analytics workloads that modern financial services firms depend on.

Xeon Scalable's all-new Mesh architecture enables faster and more efficient data transfer between CPU cores an essential benefit when dealing with high-volume datasets and scales easily. In addition, Intel's new AVX-512 instructions offer a 1.6x performance boost for data-driven HPC workloads and 2.2x speed increase for AI and machine learning tasks.

It's also designed to couple seamlessly with Intel Optane storage and memory, slashing latency to the bone and processing instructions in a flash. It's also super high-density, allowing you to put more memory in a given rack, thereby reducing data centre expenditure.

Another feature that will be particularly useful for financial firms is the added efficiency that the new Xeon Scalable generation brings to security operations. In particular, the new instructions can process encryption tasks much faster than previous components thanks to a huge increase in the amount of floating-point operations that can be processed.

Encryption of network connections and data is essential for any financial services firm, but up until now, companies would be forced to suffer an increase in transaction time of up to 10% as a trade-off. Now, however, the improvements introduced by Xeon Scalable and Optane mean that this time penalty is significantly reduced, resulting in faster and more secure transactions for your customers.

Financial firms are now more at risk of being overtaken and disrupted than they've ever been, but the same tools that are allowing their competitors to threaten them so greatly can also open up a world of new opportunities, increased revenues and more satisfied customers for businesses that can embrace them.

Discover more about the technology powering Fintech at Intel.co.uk

The UK banking sector may be one step ahead of the US industry, launching technologies such as Chip and PIN before our Atlantic counterparts, but it's still a whole lot less open than our European friends. That could be about to switch though, with open banking regulations coming into force in 2018.

Open banking refers to new rules that give financial providers, such as banks, secure access to your information via APIs (application programming interfaces) that import the data they hold into third party apps and services.

Allowing access in a secure environment means you will be able to take advantage of a wider range of personalised products and services that specifically meet your needs. It's a huge shift in the way both consumers and businesses bank, offering new opportunities for financial firms and better matched financial management and products for us, helping us manage money according to our circumstances.

Reports have already revealed the impact it could have on the economy. For example, the Centre for Economics and Business Research (CEBR) thinks the introduction of secure banking platforms will add an additional 1 billion to the UK's economy. Despite relying on automation, it could have a positive impact on the recruitment industry too, creating 17,000 new jobs.

"By improving the transparency of current account data, open banking means more third-parties will have access to customer data, which can lead to a reduction in the risk premium currently charged on interest rates linked to products such as mortgages, due to a clearer understanding of a person's underlying credit risk," said Cristian Niculescu-Marcu, head of micro-economics at CEBR. "Our analysis suggests open banking will have a positive impact on UK GDP as additional funds become available for productive use in the wider economy, but the degree to which these economic benefits are realised is dependent on the readiness of consumers to consent to sharing data."

Indeed, the think-tank noted such benefits will only be realised if Brits are willing to share their data and previous research by Accenture suggests seven in 10 people currently aren't willing to share their banking details with third party companies. Similar results were found by Clydesdale and Yorkshire Banking Group, which discovered eight in 10 people were wary of open banking and half had never heard of it.

What is open banking?

At its core, open banking is about large, traditional banks opening up the data they hold on customers to allow new products and services to be created, backing all of that up with stringent technical standards. Such data sharing will only be with customer approval and only to companies that have been vetted by the Financial Conduct Authority.

"It will allow customers to share their financial transaction data with authorised third parties, and allow authorised third parties to initiate payments from their bank accounts," says Ross Dalzell, head of business banking product and propositions at Barclays.

Open banking is driven by two regulatory changes. The first is the Open Banking remedy of the Retail Banking Market Investigation Order 2017, under which the Competition and Markets Authority outlines API standards. The other is the Second Payment Services Directive (PSD2) which requires banks to allow third-party access for payments.

The regulatory changes only apply to the nine major banks: Allied Irish Bank, Barclays, Bank of Ireland, Danske, HSBC, Lloyds, Nationwide, Santander and RBS. The rollout started on 13 January 2018, when banks and the FCA-approved third-parties started testing products, athough five of the nine needed an extension to that deadline. The new services will start to become available in March 2018, though it will take time for apps to be developed and users to take up such services.

What does this mean for businesses?

The changes open up the ability for third-party companies to build apps and services on top of banking. For example, if you have accounts with multiple banks, you could get an app to see them all in one place. Comparison sites could make it easier to compare financial services in one place and clever developers could create apps that have more features than existing banking apps, such as spending alerts, chat bots, or AI for automated financial controls.

What does this mean for businesses? Hopefully easier financial management. "Although we are only at the beginning of the Open Banking journey, the possibilities for small and medium enterprises are quite profound," said Dalzell. "We expect to see lots of new and innovative tools that benefit businesses in a number of ways. These include tools that provide insights to help SMEs manage their money, that improve comparisons of products on offer, and that use the convenience of open banking to remove laborious and administrative tasks, allowing customers to focus on growing their business." Add that into existing data be it insurance, credit, shopping or anything else and the "possibilities start to grow exponentially," Dalzell added.

So far, Barclays is using the change to offer businesses a directory of connected apps all "carefully chosen", he says to better link bank accounts with bookkeeping, marketing and more. "As for the rest of the market, while it's hard to pin down exactly where the financial technology industry will focus its efforts at this early stage, there are a few emergent propositions we expect to see in the short term," Dalzell says. "For example, digital comparison tools could enable much easier assessment of complex products such as loans, overdrafts and current accounts, and payment initiators could compete with the card payments space, potentially offering cheaper alternatives for SMEs to send and collect money."

What about security?

This banking revolution only happens if we decide to take part: banks can only share your data if you expressly allow it and, as the Accenture report noted, 69% of British consumers said they wouldn't share their banking data with a third-party. Why not? Three-quarters cited the data protection risks, while seven in ten said they were concerned about online cyber attacks.

Key to security is that the British Open Banking model doesn't mean you have to hand over banking logins to the third-party, but your bank allows access that means key passwords are less likely to be lost, leaked or hacked. "They're trying to introduce a safer model, but it's only going to be as secure as the weakest part," Arxan's mobile application security expert Winston Bond.

Bond said it's difficult for users to assess at a distance if a third-party services supplier is truly secure, especially with new players. The APIs could be a target, as banks are already fending off such attacks, and introducing a middle man "expands the opportunity for that". That said, the core idea of Open Banking isn't new it's already in place in Germany and Scandinavia, Bond noted, and as the change is regulator led, security has been considered with the API standards. We'll have to wait and see whether that's enough to convince Open Banker doubters to try out the services and apps that come out of this regulatory revolution.

Nesta has opened up applications for the next Open Up Challenge, which will award the most innovative ideas in financial technology with a 2.5 million prize fund.

It invites applicants with a focus in three areas: Business Current Account (BCA), Credit, and New Frontiers, the latter being an open category encouraging those with ideas for next-generation technologies which benefit small businesses to come forward.

"Open banking is becoming a reality and we have already started to see fintechs build tools and services that will impact the way small businesses discover, access and use core financial products and services," Chris Gorst, challenge prize lead at Nesta said.

"The next phase of the Challenge builds on this by encouraging these innovators to develop solutions that will enable small businesses to better navigate the market and compare the products and services now available to them."

Those who impress the independent judging panel will be awarded with grants of up to 100,000 each to develop their ideas and from those, an additional six will be selected to will the overall prize values of "at least 200,000" when the competition comes to an end in November.

The first phase of the challenge has already been completed, with twenty teams receiving a 50,000 development grant each. From those twenty teams, ten teams received a further 100,000. These participants can now apply for the second phase of the Open Up Challenge.

"It was evident from the first phase of the Challenge that there is an abundance of pent-up innovation ready to come to market and open banking has the potential to radically reduce the barriers for these new products to emerge. This is good news for small businesses," Gorst added.

"The Challenge is open to everyone, not just previous winners, and we are genuinely excited to see what other solutions the prize unearths."

Applications for the second stage will close on 4th May, with the final prizes being awarded in November.