Blockchain
Blockchain disrupts the manner in which trust is established around currencies. Trust can become embedded in networks themselves rather than requiring a separate third party.
Digital vs Analog trust - “Analog trust is based on face to face encounter, local knowledge and individual perceptions. Digital trust by contrast is based on algorithms and aggregate digital reputations which may lead to a liquified action of trust that can be traded and used in exchange. “
APIs
Most fintech companies will offer services to be part of hub and spokes model for the emerging ecosystem - banks as a platform - where some companies will interface with the clients and the rest will provide products and services at the backend.
PSD2 has made it mandatory for EU banks to make their APIs open.
With the reduction in price for network bandwidth and the ability of the cloud ecosystem to provide fast access to massive amounts of information, most FinTech companies now float their products on cloud services so that they can access API data like an on-premise database. Our partner Open Bank Project is joining the India delegation to groom banks on getting API savvy.
The financial services industry is exhibiting some early indication of potentially dramatic industrial disruption. With the advent of Blockchain & APIs, highly decentralised networks can emerge which makes it possible for people or even machines (Distrubuted Autonomous Corporates) to collaborate and coordinate to create entirely new financial structures.
The evolving Payments landscape : What does the future holdIJ
Payments is a $1.2 trillion industry globally led by Amazon, Paypal, and now Facebook , Apple Pay and Google Wallet.
Dwolla, Stripe (Apple’s partner), QQ Coins, Square, Adyen, Izettle etc are all part of the ecosystem in USA and Europe.
Payments sector is one of the most advanced and evolved in India with a plethora of players in every category - banks offering apps for bill payments, peer to peer payments, pre paid wallets, payment gateways, new payment bank license awardees by RBI.
India ranks fifth worldwide in mobile banking penetration, while RBI data shows that annual mobile banking transactions ar over INR 1272 billion. The IMPS ecosystem alone does 16 million transactions a month, up from one million a month in 2013. This is just the tip of the iceberg, and the upside is significant.
The cards and payments industry has always been in a state of evolution through innovation. No other part of the financial services industry has seen so much action in the last forty years. The technology platforms on which the cards industry is based have also evolved at a breakneck pace. The phenomenal growth of the internet has led to an even more explosive growth in cards and consumer payments. And perhaps for the first time now, the bitcoin and Blockchain paradigm is going to disrupt the payments infrastructure of issuers, acquirers, processors.
New players are expected to snatch upto 20 per cent of the $30 billion peer to peer market. Transfer fees are expected to drop to 2.5 per cent from current 6 per cent as a result of this competition.
Innovators: Astropay is a largest cross border payments services provider for hi fraud areas where credit cards are unavailable.
Tipalti: lakhs of micro payments with online ad networks, affiliates, SAAS technology that automates marketplaces
We will examine the competitive landscape and emerging trends, gaps in the opportunity continuum, any partnerships in offing, and potential marriages foretold in the sector.
We invite leaders , with the goal of finding strategic road maps for navigating their firms through this intense period of change and disruption in the Banking & financial services industry, to the inaugural “Europe-India Conclave : Future of Banking, Payments and Technology” , being hosted by Fintech Storm on 17th Dec 2015 in New Delhi. http://fintechstorm.com/europe-india.
The author Ms Arifa Khan is the founder of Fintech Storm and lives in london. She is an investment banker based in london, a Fintech evangelist, and writes extensively on Fintech and Blockchain. Arifa has an MBA from Wharton School of Business, Pennsylvania and a B.Tech from IIT Madras.