FinTech companies are starting up across the globe, but what exactly is FinTech?

What is FinTech?

Financial Technology (or FinTech as it’s starting to become more commonly known as) is a new industry slowly taking over.

FinTech is an industry which offers financial services to people while utilizing the latest software and technology, from computer programs to apps FinTech offers something for everyone.

FinTech covers the more traditional financial service but is also taking advantage of services such as crowdfunding and peer to peer lending.

It’s too early to say whether the FinTech industry is a passing phase or if it’s here to stay, but for the time being new start-ups are launching all the time.

FinTech in the UK

The UK Government have already pledged their commitment to making the UK the FinTech Capital of the World. The UK FinTech industry has already managed to generate £6.6 billion and created 60,000 jobs in 2015.

Recently the UK and Singapore came together to launch the FinTech Bridge. The Monetary Authority of Singapore (MAS) along with the Financial Conduct Authority (FCA) have joined to form a regulatory cooperation agreement.

This new agreement allows UK and Singapore regulators to refer FinTech firms to similar companies based in the other country. There are also guidelines which state how regulators will share and use information.

FinTech vs. the banking industry

The banking industry has recently been featured in the media a lot; with a string of crisis’s affecting consumer confidence banks are finding rebuilding their reputation a tricky task. The FinTech industry, however, is soaring, and this had made the banks stand up and take note.

A recent report has stated that 63% of customers would use and recommend a FinTech company over a traditional financial service.

The banking industry has two options; they can self-design their financial technology platforms, or they can use the existing FinTech company that has pre-designed platforms. Both of these options come with costs and risk.

The benefits of FinTech

The benefits of the FinTech industry are –
• FinTech can offer potential solutions to businesses
• FinTech solutions are effective and efficient
• Financial solutions on offer include improved cash flow generation, capital management, monitoring, online transactions, etc
• Technology exists which can match lenders with borrowers
• The digital aspect of the technology allows for simpler auditing processes

The future of FinTech

It is too early to speculate how the FinTech industry will progress, with new businesses opening every day it would appear that the sector still has a lot of life in it yet.

One thing is sure; FinTech has opened up a whole new side to financial services which forced other industries to change and adapt or else they run the risk of vanishing.

The FinTech industry successfully shook up and brought the Financial Industry back in action.

The long-term impact and the overall success of the FinTech industry will be clearer after a few financial cycles, but one thing is for certain. There will be a lot of people paying close attention to the bigger picture.

The post FinTech Is Slowly Taking Over The Financial Industry appeared first on My Money Platform.

Banking scams have hit the UKs financial industry; this has caused fraud rates to rise by 26%. The biggest contributor to this was remote fraud which has cost the UK consumer £168 million in 2015.

Financial fraud is rising

In 2015 £755 million was stolen from financial institutions and British consumers.

The methods adopted by fraudsters are becoming increasingly smart. They are starting to target people directly as a result of financial institutions tightening up their security measures.

Attempts have been made by various organizations and companies to alert the public to new scams adopted by fraudsters. The advice giving out is to remain vigilant and do not give out personal details unless you are 100% certain to whom you are speaking.

Despite these measures, fraud is still continuing to rise.

Remote fraud

Fraudsters will pretend to be bank staff, police officers, or even representatives from various companies. They will contact you directly to either obtain your bank details or encourage you to send money to them.

This type of fraud has become a gray area in the industry, and banks have been known to refuse refunds on the basis that victims handed over their details voluntarily. Victims of this type of fraud have also reported that the police have also shown little interest.

There has been a 64% rise in internet banking fraud and a 92% rise in telephone banking.

Other areas of fraud

In 2015 –
• Card fraud rose by 18% to £567 million
• Cheque fraud fell by 6% with a total of £18.9 million reported lost
• There was also a reported 2.8 million lost toward mobile banking
• Card companies and banks successfully prevented a total of £843.6 million.

What is going to be done to talk financial fraud?

The UK in February announced the creation of a new task force to tackle fraud.

The taskforce will include representatives from the police, the government, and the banking industry.

Despite the announcement of the new task force consumer confidence has been damaged. When you take into considerations that victims get a reply of “we are helpless, or we cannot rectify the problem” by the police or by bank staff then this it’s not surprising.

How to prevent fraud

There are steps which you can take to lessen the risk of being a victim of fraud –
• Remain alert – there is an increase of fraudsters who are imitating Government and company officials
• Do your research – if you are unsure about a phone call, email, or letter you have received then look online, people are sharing their stories and companies also regularly issue warnings
• Be care with payments – be wary of those who demand you pay upfront or want you to use companies such as Money Gram to send them money, legitimate companies and Government organizations will not require you to pay them in this way
• Do not rush yourself – it’s a common tactic among fraudster to rush you or demand you give them an immediate answer, do not allow yourself to feel pressured, take your time and make informed decisions

These are just a few steps you can take to keep yourself safe. New scams are operating all the time, so it is crucial that you safeguard yourself and keep an eye out for fraud alerts.

The post Bank Scams Are Causing Fraud To Increase appeared first on My Money Platform.

In 2012, the RBS Group was hit by a banking disaster due to computer system problems. Could similar complex business codes cause further disruptions?

The 2012 banking IT failure

The RBS Group, which includes the banks NatWest, Ulster Bank, Coutts, and Royal Bank of Scotland, computer systems became severely corrupted after a routine computer update.

The corruptions, which happened in mid-June in 2012, affected the computer systems ability to process payments/ direct debits, withdraw cash, view bank details, and various other banking transactions.

The system failure affected many customers, some of which faced fines for late payments. Some customers had to wait to regain normal access to their accounts until mid-July. In an attempt to assist clients who were affected many branches extended their opening times.

RBS faced a fine of £56 million for the incident in 2014.

Could another event like this happen again?

Banking computer systems are extremely complex and are often ancient.

In the UK the mission critical banking systems have between 800,000 to 900,000 lines of code; this is considerably more than the standard mission critical banking system which only has roughly 6000,000 lines of code.

The bigger and more complex a system is the harder it is to maintain and the likely hood for glitches and corruptions increases. The average UK bank will experience 20 to 30 computer incidents a month.

Keeping in Lieu all that is going on, many foresee another major IT event in progress i.e. near future

Can another incident be prevented?

Avoiding another event like the RBS Group crisis is possible. However, this would not be an easy process, and it would involve banks replacing their core systems with new ones.

It may sound like a straightforward task. However, it is more complicated and time-consuming than it sounds. There is also the risk of issues along the way which could range from slight teething problems to major system breaking problems. Replacing an old system for a new system could potentially cause more disruption than it solves.

The problem with banking computer systems is mainly down to the software. The software most commonly used in banks is ancient, and most of the original designers of the software are no longer available. Due to the old feature of the software, it leads to a knowledge gap as many software engineers do not have in-depth knowledge about the systems they use.

The future…

The banks will be forced to update their systems eventually. Banking systems are under increased strain, and the cracks are already beginning to appear.

It is extremely likely that banks will be forced to update their systems over the course of many years to minimize disruption. In the meantime, consumers should be vigilant when it comes to their accounts.

It is always good practice to regularly check your bank account. Make a note of the amount you have in your account, details of regular payments, keep an eye out for suspicious activity.

The more you know about your account, the more prepared you will be if you are unfortunate to face problems, whether they will be the next banking crisis or theft/ fraud.

The post Could The UK Be Faced With Another Banking Crisis? appeared first on My Money Platform.

Making sure that you know what you’re getting into and stay wise to any hidden potholes makes a big difference to your finances. Not knowing what your options really are can lead to you not getting the maximum possible benefit from any investments. Not knowing the common hidden fees and downsides tucked away in the fine print, as we’ve all probably found at some point, leads to nasty shocks down the line. Wising up to the details of your finances gives you the certainty that you’re making the most informed decision you can.

A problem at all scales

Pretty much everyone knows that, in the end, bankers are out to make money. Ideally, they manage this without you getting burnt by unexpected fees, questionable investments, and the like. But it often feels like the opposite is happening, and the banker is cashing in while your finances seem to be in a tailspin.

Even when things aren’t that bad and it looks like you’re both benefiting, there’s a difference between ‘not going badly’ and ‘best case scenario’. Understanding your finances and how the financial system works can help you to direct your finances to maximise the benefit to you, rather than to a third party.

Sometimes, this is even the case with super simple stuff. When a trust matures – for example, a trust fund set up for a young relative to be accessed once they hit twenty-one – the bank will automatically convert it into a new account unless directed otherwise in time.

In itself this isn’t a bad thing. It’s just that the type of account is going to be the one with the least return for you. And it’s easy to just let it drift into that state of being. Sure, it’s a helpful default that means if you’re not sure where to invest or move the money immediately, it starts racking up interest. Just at a negligible rate.

Knowledge is power

Knowing what the options are, and how the default compares, can make a pretty big difference even at this level to what happens to your finances. Unfortunately, the world of finance is up there with legal jargon for being inscrutable.

It’s also easy to get sucked into decisions thanks to a particularly magnetic promise – particularly good interest rates, say – and not pick up on the conveniently less advertised downsides. So-called ‘hidden’ fees, such as charges to use your card abroad, aren’t exactly something most banks want to splash all over their advertising material! Even just knowing exactly what these fees are can allow you to plan how to minimise how many of them you pay…so long as you can figure out exactly what fees you’ll be charged, when, and why.

Luckily, there are also people who make it their business to breakdown the jargon and go past the flashy advertisements. Not just in the form of advisors for hire, either. The internet is full of people discussing the financial world and how to navigate it, so long as you’re prepared to set aside a little time to browse.

The post How Do You Stop Lining The Bankers Pockets? Knowledge.. appeared first on My Money Platform.

The financial crash in 2008 caused panic and terror amongst the financial sector. The biggest fear was a complete financial meltdown which would have a knock on effect on other industries.

Why would a financial meltdown cause so much damage?

We live in a world where near enough everyone (including government organisations and businesses) has a bank account. Most people only possess a minimal amount of actual physical cash.

If the financial industry collapses, then this means all account would be frozen. Nobody would be able to withdraw any money; we would be unable to pay for anything. The whole system would be at a standstill.

Why did the crash happen?

The whole financial industry relies on selling various types of debts (or IOUs) in order to make a profit. The debts get passed around until someone cannot pay. If enough people are unable to pay their debts then the whole system collapses.

Since the financial industry is the countries main source of income, a collapse in the industry means that no money is generated.

Will another crash happen?

The government have made changes to how the banks are regulated and who/ how much money they can lend to people. However, if these changes are enough still remains to be seen.

The media cannot seem to make up their minds if we are on the road to recovery or not. Articles published are often vague, confusing, and contradictory. Financial experts however feel that the system is set up so that it will constantly fail and then recover. In order to prevent another crash we would need to dramatically change the system or introduce another source of income.

Could we change the financial system?

In order to change the system we would essentially have to change the way we think about money and power. The system is essentially designed to maximise profit for those at the top. We would need to invent a system with distributes wealth equally.

It may be possible, but it is unlikely to happen.

Could we create another source of income?

We used to generate a lot of income from making goods and then trading them with other countries. However, items can now be produced elsewhere in countries where resources and manpower are considerably cheaper.

We do not make many goods in this country anymore because it is not cost effective. The farming industry is struggling because cooperation want more goods but for a fraction of the price.

In order for us to find another source of income we would, once again, have to change our attitudes towards money.

So, is it possible to prevent another crash?

Quite simply, no it’s not possible. We have created a system in which we are essentially reliant on. In order for things to change we would have to be prepared to spectacularly change the way we think. We would be reliant on others to relinquish their money and power in order to create a fairer system.

As unfair as it may be, no one can realistically expect anyone to just give away their money.

The post Have We Actually Learned From The Crash? appeared first on My Money Platform.

In a world which appears to be run by the banks, it can feel like we are powerless. However, you may have more power than you thought?

Take back control of your money

Money affects all of us, without money we would struggle to survive. This is why it’s so important to look after your money. However, our financial system is designed to make money at our expense.

Since the system is designed to be against us it’s understandable that many people feel unable to fight it. Most people don’t realise that it is possible to be in control of your own money.

Here are some ways in which you can take some power back

Do your research beforehand

The banks are there to make money; they do not always have the publics’ best interest at heart. Bank employees are under immense pressure to make sales and reach targets. This quite often means that customers do not always get the products they want/ need.

If you do your research before speaking to your bank you greatly reduce the risk of being sidelines by hard pressured sales.

Pay cards and loans in full and on time

The banks make their money from debt, the banks rely on people not be able to manage their money. It’s important you ensure you also have sufficient funds in your account and you always pay your credit card and/ or loan payments fully and on time. This minimises the amount of money the banks are making from you.

Switch your bank accounts

Banks rely on customers depositing money into the bank, this money is then used to lend to other customers. The banks then make a profile from the interest and bank charges.

If you feel you are paying too much then shop around and see if you can get a better deal. You also do not need to stick to strictly with banks. Credit unions are a good not for profit alternative to the high street bank.

Look for alternative to loans

A loan is not the only way to obtain money, there are alternatives available –

• Sell goods – you can sell pretty much anything on the internet and there are also shops in the high street which will take various items in exchange for cash
• Online – there are various websites available which will pay you to take surveys, watch videos, etc
  Rent things out – from conventional things like parking spaces and garages from the things you probably never thought us like exercise equipment and electrical goods, you can rent out almost anything
• Odd jobs – from babysitting to mystery shopping there is a whole host of possible ways to make money on the side
• Peer to peer lending – instead of banks lending money to customers you can lend to or borrow from other people

Invest smartly

If you are going to invest, then be smart about it. Firstly, don’t throw all your money at one thing, spread your investments out. Secondly, see investments as a long term commitment, don’t get pulled in by the highs and put off by the lows. Thirdly, make sure you fully understand everything about what you’re investing in, I cannot stress enough about the importance of doing your research.

The post How To Beat The Banks appeared first on My Money Platform.

There are several lessons you could take from Wolf of Wall Street, mostly including things like ‘don’t drive under the influence of drugs’ and ‘committing fraud is a really bad idea’. But there are also less general lessons to be learnt from the business practices depicted: such ‘pump and dump’ strategies really exist, and they really burn if you get caught out by them.

What is the ‘pump and dump’ strategy?

Essentially, it’s trying to turn a profit by forcing up the price of stocks and then
The strategy shown in the film boils down to three steps:

• Get wealthy, reliable clients to buy large amounts of stock issues from his firm by guaranteeing a certain return on the investment – the rat holes.
• Sell further stocks to less affluent clients, driving the price up.
• Once a certain increase in price has been reached, instruct the ‘rat holes’ to sell up. Those clients take their guaranteed return, and the firm pockets the difference.

At its core, that’s how making a profit on the stock market works. You buy your shares, and sell either when you no longer think it’s a useful investment or you want to cash in as the price rises.

Unfortunately, the deliberate guaranteeing and artificial driving up of the stock price means that the literal middle man in the above strategy loses out. The less affluent clients who were talked into buying the second wave of shares see their investment crash and burn. It’s the already wealthy clients brought in at the first step who profit, along with the firm itself.

Even more unfortunately, the scam works because the stock brokers manipulate these investors into it. A broker is supposed to provide advice and make decisions with reasonable certainty that any investment is in the client’s best interests. Talking up a stock as the hottest investment, knowing that it’s part of a scheme to inflate prices in preparation to cash in and let the whole thing crash, doesn’t really meet that specification.

How to avoid the scam

It might not be the happiest advice, but if it’s too good to be true, then it almost certainly isn’t. These scams work by the dropping of ‘hot tips’, either directly or by “accident”.
Hint: if you pick up a message on your answer machine detailing the best new investment, apparently to the wrong number? Well, sure, it could be an honest mistake and you might just be getting a real scoop.

More likely it’s only a ‘wrong number’ because someone programmed the call to give the tip off to as many people as possible, apparently by accident. I mean…if you had a tip off to pass on to someone about something you thought was going to be a cast iron investment, wouldn’t you just say to call back ASAP, rather than leaving an answer phone message?
It sounds obvious, but this very strategy has been successfully employed in pump and dump scams before. Keeping your wits about you and always considering why someone would be passing on advice on a certain investment can help keep you from falling prey to the Wolf of Wall Street.

The post The Math Behind The Wolf of Wall Street – How It Affected You. appeared first on My Money Platform.

So what is it exactly that they do not want you to know? The short answer often feels like ‘everything’, possibly along with feeling like you want to tear your hair out in frustration. Unfortunately, that doesn’t help remedy the problem. What does help is doing your research to make sure you’re wise to the common things they try to keep you in the dark about.

And one of the areas where being kept in the dark can lead to you ending up with the sub-optimal set up is when sorting out a mortgage. So here is a quick round up of five key things banks and mortgage brokers don’t want you to know:

You can DIY mortgages

Particularly with the amount of info online! It’s pretty easy to find and compare mortgage rates in your local area, then call a bank yourself rather than paying someone else to do it. Even if you use a mortgage broker, doing your own research as well can help prevent the wool being pulled over your eyes if it turns out they aren’t as scrupulous as you’d hope.

A 5-year fixed rate isn’t one size fits all

Even if you get the lowest fixed rate on the market, you might have been better with the variable rate instead. On a fixed rate, there’s usually a hefty start up fee. Sure, it’s a one-off – but particularly if it’s a smaller mortgage, it might be more cost effective to have a lower fee and higher rate.

You’re also pretty much tied in to staying at that property for the full duration. That might be the plan, but the lack of flexibility could be a problem if unforeseen circumstances come up. Even when you can in theory transfer the mortgage to a new property, you have to re-apply and may not get the same deal, or not qualify under changed criteria.

Close at the end of the month

Interest starts to accrue from the day your transaction closes – so close on your home loan at the end of the month not the start. You’ll have a greater closing cost, but less prepaid interest. If you close at the start of the month, you have to pay that month’s interest as well at that between closing and your first payment.

No-one has no closing costs in reality

If you aren’t charged an official ‘closing cost’, you’re paying for it somehow else. Higher interest rates or other fees compensate for the lack of direct cost of closing, so overall you might not be any better off on this kind of deal.

Tip of the iceberg

This isn’t the only area where your bank and related brokers aren’t keen for you to know everything. Even at the level of being aware in advance of what fees you’re likely to get, banks don’t really want you to know. After all – those hidden overdraft and access fees are one of the ways they make their money!

It’s not even everything about a mortgage that you should probably know but likely won’t be told. But it’s a starting point of things to look out for and think about. In the end, the key thing is to not take things at face value and independently fact check whatever you’re told rather than relying on the sales spiel.

The post What The Banks and Brokers Don’t Want You To Know. appeared first on My Money Platform.

Business brokers can be a blessing or a curse, so it’s important that you find one that will work for you.

What makes a good business broker

Business brokers can be a valuable asset when buying or selling a business. A good broker will be there every step of the process to ensure a smooth transaction. They will get to know the buyer, seller, and business inside out.

It’s important to remember that in most cases the business broker will be paid by the seller and not the buyer. Although, a bad business broker can negatively impact both sides, so it’s best for all parties that you choose your broker well.

Things to check when choosing a business broker

When you are choosing a business broker here are some things you should check before you hire them –
Background – what industries have they worked in? What is their success rate compared to their total number of jobs? Have they been involved in any legal proceedings and why?
Figures – How do they determine the value of the business? What sort of fees will they charge? Most brokers work on commission based on the final selling price of the business, make sure you are not faced with hidden additional charges

• Involvement – A good broker will want to oversee every stage of the process, they will be hands on and easy to contact
• Reputation – speak to previous clients and find out their experiences , search online for them and see what you can find

How to get the best from your business broker

A business broker gets paid by the seller, so therefore it is imperative that the broker and the seller develop a good business relationship –

• Trust their experience – they have the experience and insight that you may not have, question what they say but do not complete disregard everything you don’t like
• Negotiate and compromise – any relationship, including professional, requires both side to come together to achieve success, in order to get the most value from your broker it is best to work with them rather than against them
• Be willing to let go of expectations – sometimes what we want and what we can realistically get do not match, brokers are not miracle workers
• If things do go wrong, speak up – if you genuinely believe that your business broker is not carrying out there end of the agreement then speak up

Do I need a business broker?

A business broker is not essential; it is possible to sell your business without using one. However, people choose to use one because they don’t know how to go about selling their business.

By selling a business on your own, financially you can be better off. However, it is then down to you to handle all the legalities, paperwork, marketing, etc yourself. Selling a business yourself can be extremely time consuming and complex.

If you do decide to sell your business yourself ensure that you do your research and seek advice where necessary.

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