Confidential computing uses secure enclave technology to facilitate the establishment of a Trusted Execution Environment (TEE) based on the security elements offered by CPU manufacturers.A TEE enables memory and data segmentation, CPU-based encryption and decryption, and additional security elements that differ based on the CPU manufacturer. The efforts can reduce the possibility of sensitive data getting exposed, while measures are recommended for control and transparency by allowing encrypted data to be handled in memory and minimizing the threat of exposing it to the rest of the system. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;">Potentials of Confidential Computing</h2>This raises the question of what motivates such a positive mindset. The need for more detailed data without compromising security or privacy is a reasonable explanation. Organizations of all shapes and sizes desire to utilize their data, even the most sensitive data, for internal purposes and work with other corporations.This bit of tech has the potential to promote relevant research and lead to the development of new remedies for enhancing productivity, health, and quality of life. In highly regulated businesses, like healthcare, banking, IT, etc., confidential computing offers more efficient and secure ways to use the most sensitive data.Each of the above industries needs to use data responsibly and access enormous amounts of highly private information. In essence, businesses in any industry can benefit from confidential computing by safeguarding their data while it is being used, moved, or stored.Infrastructure protection is incredibly challenging as there are too many vulnerability points. Confidential computing is centred on protecting data while it is being utilized, which is impossible with any other technology.<h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;">How Does Confidential Computing Benefit Financial Institutions?</h2>Why is confidential computing protection essential for highly regulated businesses to protect user data, Multi-Party Computation (MPC), and other applications?As previously mentioned, today's financial threats associated with the cloud give people goosebumps merely thinking about them:<ul style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;">Ramped-up money laundering operations</li><li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;">Seven-figure ransomware demands</li><li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;">A whole buffet of fraud</li></ul>The cloud is a haven for cyber theft as financial institutions scramble to find security mechanisms. Banks desire and require the cloud's efficiency. Companies still worry about storing sensitive data in the cloud environment due to data privacy and governance issues. Can they comply with legal requirements without compromising the confidentiality and integrity of customer data?In a way, banks are catching up to the exponential growth of cloud computing. Managing critical, confidential information is essential to any bank's operations, but the laborious, resource-intensive, and conventional industry practices can't scale to the cloud. The crucial argument, therefore, becomes, "How secure does the cloud power my legacy systems in a world?" Because of this, confidential computing is specifically designed to meet the banking sector's deep encryption and privacy requirements.<h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;">How Does Confidential Computing Benefit Healthcare Institutions?</h2>For many years, the improvements provided by using AI and ML have been accepted with open arms in the healthcare industry. These technologies are considered a utopian answer by the analysts and scientists addressing today's healthcare concerns because of their ability to analyze and make logical sense of complex data sets efficiently, accurately, and with cost- and time-saving benefits.Healthcare organizations "need to make cybersecurity a fiscal, technical, and operational priority," according to the 2020 HIMSS Healthcare Cybersecurity Survey.HIMSS also highlights that "patient lives depend upon the confidentiality, integrity, and availability of data, as well as reliable and dependable technology infrastructure." The frictionless, independently audited, and expandable data security provided by confidential computing technology benefits healthcare organizations in all circumstances and may be used for the demanding processes associated with AI.Understanding that the information is protected and encrypted throughout every level will help organizations speed up the development of new AI solutions, enhance patient clinical results, and reach great medical discoveries. This implies that medical research teams won't be constrained by the fear of cybersecurity incidents and legal penalties in using AI to its full potential.<h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;">How Are Businesses Adopting Confidential Computing?</h2>Even though the market and the industry are still relatively young, it is receiving a great deal of attention. For instance, the European Network and Information Security Agency (ENISA) has included confidential computing in its checklist of cutting-edge security measures that ought to be taken into account when enforcing the EU General Data Protection Regulation and the IT Security Act (Germany) (GDPR).The amount of the world's best technology businesses investing in confidential computing has become the most optimistic development in the field. On the hardware level, this mainly comprises AMD, Intel, and ARM, while some other suppliers, most notably NVIDIA, are starting to express interest. As previously indicated, the top cloud service providers, including Amazon, Google, and Microsoft, all have private cloud options available right now.Furthermore, a large number of companies have surfaced to solve the current drawbacks or difficulties of the available confidential computing services. Anjuna, CYSEC, Edgeless Systems, Fortanix, Profian, Scontain, and more suppliers are among them. Red Hat and VMware, two well-known software companies, are also participating in the market.On top of secure computing solutions, online businesses are also joining the market and developing apps and services like data clean rooms. These include, among others, Decentriq and Cosmian.<h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;">Conclusion</h2>Imagine working together on scientific studies in the cloud with people from other countries and businesses while ensuring the confidentiality of private medical records. Imagine being able to develop vaccines and cure diseases more swiftly, thanks to secured collaborations. Transformational technology will genuinely address issues which will improve our quality of life; one among them is confidential computing. All implementation of an enterprise cloud needs and will include it. This is a challenging mission that calls for teamwork to progress the technology.&nbsp;

Soumya Sarkar

Everything You Need to know about Confidential Computing

<h3 id="introduction">Introduction</h3>RPA in the banking sector? What to expect? The banking sector is evolving. Rapid changes in the landscape have made it essential for banks to invest in new technologies to stay ahead of competitors. RPA can help achieve this goal by making your business more efficient, faster, and smarter - which will allow you to provide better services and make timely decisions for customers. There is a lot of potential benefits banking sectors can accumulate with RPA implementation. One of the essential benefits is it improves business efficiency. Let's take a look at the first thing that can be done by using RPA in terms of banking services. That would be customer service and handling operations of account holders. For example, RPA could handle account opening for young adults who may not know what an account is or how it works. This can be handled by the software, which is programmed to answer the user questions with legitimate answers based on what a human operator would have said in response to that question. Besides, automation increases customer satisfaction. With AI technology becoming more eminent across the industry, RPA has become a mandatory investment for the banking sector. With the <a href="https://www.suntechnologies.com/quick_read/rpa-is-altering-the-business-landscape-with-the-emerging-market-dynamics/">trusted IT service provider</a>, banks can consider revamping their legacy systems and make a quick decision about RPA implementation for greater success.<h2 id="the-digital-shift-reshapes-end-to-end-operations">The digital Shift reshapes end-to-end operations</h2>The need for automation across industries, digitization initiatives and process efficiency are only driving the need to employ RPA technology faster than ever before. RPA reshapes the way we look at automation and gives a new meaning to how humans interact with machines. RPA is no longer limited to the banking sector's new opportunities, and it's efficient for complete business transformation. This means that RPA can enable customer service officers to deal with more people than they could carry out manually in banking. RPA is considered as a technology that can help bring about this change. Banks are required to undergo major transformation efforts, regulatory changes, and customer demands. While there will still be a requirement for human labour in certain areas, RPA can ease the burden on these departments and reduce manual errors while also speeding up processes and improving customer service overall.<h2 id="how-could-rpa-have-an-impact-on-the-financial-services-industry">How could RPA have an impact on the financial services industry?</h2>The back-end of banking processes enables complete automation to be carried out by computers. The business benefits RPA could offer for banking are worth the investment, what the industry can expect in the future. RPA has been around for a while, so there have already been several offerings in this space. However, you probably already know that the use-case is not just another checkbox item. Still, it is a game-changer for financial service providers who are frustrated with their inability to scale their back-office operations at an industrial level without investing heavily or outsourcing work entirely.In banking, businesses will want to keep their processes automated and move more work to the front-end desk. This could include account opening, online payments, ATM handling, customer relationship management (CRM), credit check processing, and so on. However, to reap the full advantages of RPA, companies should focus more on what they can expect from a provider they opt for.<h2 id="typical-pain-points-of-rpa-implementation">Typical pain points of RPA implementation</h2>All enterprises seek new ways to stay competitive without compromising on consistency, quality, and compliance. RPA can help with all three. However, implementing this technology is not always plain sailing.A few challenges are:1. RPA technology is new and has not been optimized for use with existing platforms and systems. Environmental factors such as security controls, compliance requirements, audit trails, and lengthy training must be worked around or overcome.2. Resolution of conflicts between a business's policies and the automation framework can challenge the IT department's credibility.3. RPA can be both an automating and a delegating technology, which means that business analysts need to get involved in the development process and manage the automated tasks.4. There is no standard toolset for RPA, and many development environments and languages are used, so it is often difficult to identify all the moving parts.5. Developers are reluctant to re-deploy manual processes due to their often lengthy training process, lack of autonomy, lack of motivation, and fear of data loss in case of error during automation, among other factors.<h2 id="best-practices-to-implement-rpa">Best Practices to implement RPA</h2>Organizations need to overcome the challenges of meeting an enterprise's IT and compliance governance requirements, ensure that security and regulatory gaps are addressed, and resolve issues around making developers feel empowered to re-deploy manual processes.1. Make sure your business policies are aligned with your automation framework. Ensure that the automation framework knows all business policies related to your business processes.2. Ensure the infrastructure and development tools support automated deployment, i.e., ensure you have access to source code repositories and change management systems that support automated deployment when necessary.3. The language used for RPA deployment must be machine-readable, which means it should be interpreted and understood by the automation framework. This can sometimes prove a challenge for legacy systems and platforms that are not compliant with industry standards. For example, legacy systems used in the financial industry often rely on text-based commands, which tend to create challenges with modern tools that may require XML or JSON inputs to work properly.4. Make sure your development team is comfortable working in your business domain to implement RPA. Most of the time, IT teams have their domain expertise and skills to maintain or develop independently of the business.<h2 id="rpa-implementation-methodology">RPA implementation methodology</h2>To implement RPA, an organization may be required to update its IT system by accessing an expert third-party vendor who can provide the necessary RPA software. Implementation should not take too long. The developer will create a plan for RPA and recommend the best way for your company to implement it. This planning period can help ensure that you don?t run into any problems or problems with the software and all of its features. Once this is complete, it?s important to train staff on how their roles will change, making sure they?re comfortable with the new system in place.RPA implementation can make your company more efficient and reduce costs. It?s relatively low in price and quick to implement, so there?s no reason not to do it. However, you should be aware of its potential problems and risks. If you run into trouble during RPA implementation of the project isn?t working out as expected, a company that <a href="http://www.suntechnologies.com">specializes in business IT services</a> can be a great resource.<h2 id="conclusion">Conclusion</h2>RPA and AI are now part of the finance sector. Reporting says the use of these automation technologies will grow at an exponential rate over the next decade. Understanding what they are, their function, how they work, and how to implement them is key to not getting left behind by this trend.The rise in RPA/AI has created even more jobs for humans. It frees employees from monotonous tasks that don't require human intelligence skills. However, the most significant impact of RPA/AI systems is cutting down on labor hours and financial costs. These savings translate into more profits, increases in revenue, and greater job security. That was the driving force behind companies adopting RPA/AI solutions. The BFSI sector is no exception to this.The popularization of RPA and AI can only be unlocked by a few enterprises embracing the technology. The most common use-cases for AI include risk detection, fraud detection, regulatory reporting, compliance declaration, and KYC/AML. On the other hand, the RPA use cases are more diverse and inclusive work processes in financial service companies with repetitive tasks. As with other sectors, AI and RPA are also making their way into the BFSI sector and have already reached peak growth rates.

Ashlin Jenifa A L

RPA in Banking: Experience the Unlimited Automation and Superior User Experience

<figure class="kg-card kg-image-card"><img src="https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/aac56b0173e155bdfb40c8091516f33d.png" class="kg-image" alt loading="lazy" width="643" height="528" srcset="https://techfastly.com/content/images/size/w600/2020/09/image-1.png 600w, https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/aac56b0173e155bdfb40c8091516f33d.png 643w"></figure>Despite the first quarter of 2020, the US small business index score has decreased by about ten points from the fourth quarter of 2019. At the same time, the same index shows a growing uptrend from 2011 to 2020. There are more than 30 million small businesses (<a href="https://www.sba.gov/">SBA</a> statistics) in the United States, they take only six days to open, and around 33% get started with less than $ 50,000. Besides personal savings, the top sources of survival for small businesses are profits/assets, credit cards, and bank loans. Overall, small business banking plays a central role in the future growth of small businesses/startups.What is business banking?With business banking, also called commercial or corporate banking, banks provide financial and advisory services to small and medium businesses and larger corporations. These services are tailored to each business's specific needs and include deposit accounts, loans, and credit card services. Banks may also offer asset management and securities underwriting to their corporate and business clients, cash management solutions, payroll services, and fraud protection. Demand for business banking is increasing in the United States, as the business field is on unstoppable growth.What are the top 5 Banks for Small Businesses in the US?<figure class="kg-card kg-image-card"><img src="https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/2bf5989912c48cb514404e8291caa48c.png" class="kg-image" alt loading="lazy" width="643" height="322" srcset="https://techfastly.com/content/images/size/w600/2020/09/image-2.png 600w, https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/2bf5989912c48cb514404e8291caa48c.png 643w"></figure>Coming in at first place is <a href="https://www.chase.com/">Chase</a>, a traditional bank that offers everything that a small business might need, has lots of locations, business checking with minimal fees, and it's one of the best online banking and mobile banking available.Navy Federal Credit Union occupies second place. It's not technically a bank but offers services suitable for small businesses: business checking and savings, loans, credit cards, payment processing, and even retirement and insurance. To open a business bank account at Navy Federal, you'll first need to join as a private individual because it's not a profit bank. It charges lower fees and offers higher interest rates on savings than profit banks.In third place, there is an online bank: <a href="https://www.axosbank.com/home">Axos Bank</a>. It's the oldest online bank in the United States and stands out thanks to its interest-bearing checking account. It gives good interests and excellent online and mobile banking options. The account includes up to 50 free items per month, so it is not suitable for businesses with many transactions.<a href="https://www.wellsfargo.com/">Wells Fargo</a> takes up fourth place and is the most popular bank in the United States. Because Wells Fargo is so big, it offers virtually any service you might need, several business checking accounts, payroll services, business tax services, etc. Wells Fargo is one of the best options if your small business uses a lot of cash.In the last position, there is <a href="https://www3.mtb.com/">M&amp;T Bank</a>. It's suitable if your business is on the East Coast, but its strength is the business review to achieve the best small business success.What will be the impact of Artificial Intelligence in the future banking development?Banks' traditional role in the economy has changed from the conventional intermediation approach to a financial shop, in which banks offer a wide range of financial services. Banks and financial markets have become more linked, integrated, and recently, Fintech has created other disruptive forces in the financial industry that have yet to be explored in the upcoming years.<figure class="kg-card kg-image-card"><img src="https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/6a3e4d82db0a2ac06dc76b350f15ad29.png" class="kg-image" alt loading="lazy" width="643" height="397" srcset="https://techfastly.com/content/images/size/w600/2020/09/image-3.png 600w, https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/6a3e4d82db0a2ac06dc76b350f15ad29.png 643w"></figure>There are three main channels where banks can exploit artificial intelligence to save on costs, and they are front office (conversational banking), middle office (anti-fraud), and back office (underwriting). The most significant savings opportunity comes from the front and middle office. AI is leveraged on the front office for customer identification and authentication, deepens customer relationships, and provides personalized insights and recommendations with virtual assistants' help. Moreover, AI works within middle-office functions to detect and prevent payment fraud and improve anti-money laundering (AML) processes and regulatory checks. Big tech companies will move deeper into banking. Apple launched its Apple Card with Goldman Sachs for private consumers. Maybe it will be available for small businesses in the future. Stripe Capital has launched a debit card for businesses, and Amazon Lending offers loans to help small-medium companies grow. Large tech companies are gaining a powerful scale, hoovering up data, building relationships, and brands with banks that are behind their financial efforts. Banks are finding additional ways to partner with Fintech, for instance, HSBC has launched a digital lending platform built with technology from the Fintech Amount. These partnerships will multiply as other banks look to enter into the digital lending space. Recent research confirms that digital lenders more than doubled their market share in the past four years, with consumers turning to digital-first providers. Open banking will play a vital role in the future. It allows third-party providers to securely access and analyze a business' historical banking data almost instantly. Open Banking could help in tracking cash flow and avoid late payments. Runpath, part of Experian, is developing a cash flow management tool that uses Open Banking to provide a historical analysis of income, outgoings, and cash flow capacity. By analyzing and tracking real-time banking, the tool can understand when cash flow is crunching, allowing the business owners to access funding in advance to mitigate any negative impact. Happy Small Business Banking growth!

Claudio G. Giancaterino

Small Business Banking in the US

Imagine a future where cryptocurrency and decentralized finance become the norm, and banks become an option. Although this isn't happening anytime soon, DeFi is catching like wildfire. The total value locked in DeFi increased five-fold in just six months and stands at over 4 billion dollars. I agree that this is a drop in the ocean compared to the trillion-dollar traditional banking industry. Still, given the pace at which DeFi is moving, it'll engulf the banking industry.<h3 id="but-what-exactly-is-defi">But what exactly is DeFi?</h3>DeFi stands for Decentralized Finance and is often referred to as the Open Finance Movement. Decentralized finance is built over smart contracts, protocols, digital assets and are accessed using a dApp (Decentralized application). Consider it a futuristic system of every traditional financial service you use today - loans, trading, insurance, and more. It runs on a trustless, permissionless, and open blockchain where the control is not under any individual entity. The majority of DeFi applications now are based on lending and borrowing with impressive interest rates that sometimes touch double-digit figures (Sounds way better than the negligible interest rates banks provide, doesn't it?)These applications run on smart contracts that are programs that execute when certain conditions are met. The code is written and released, and from then on, there is no central power handling your assets. Everything is automated with almost no human intervention (although developers deploy upgrades or bug fixes). Most of the DeFi applications are run over the Ethereum network. Even though there is still a scalability problem, it is expected to improve vastly with the release of Ethereum 2.0 as it is moving to the Proof-of-Stake system from the current Proof-of-work mechanism.<h3 id="traditional-finance-vs-decentralized-finance">Traditional Finance vs. Decentralized Finance</h3>The most 'in-your-face' difference is that an organization runs banks, and they are responsible for the money you deposit in the bank. They lend it out as loans, or they charge you for their services. DeFi is fighting against this to bring about a decentralized system where people would no longer need to rely on a third party, like banks, for their financial needs. With DeFi, people can transfer money across countries (depends upon the regulations). This is what DeFi is aiming at, a globalized peer-to-peer financial system. People that aren't in the crypto space often assume cryptocurrency is volatile and highly unstable, and it is not safe enough to use them as a global currency. This is where stablecoins step in. Stablecoins are a cryptocurrency too, but they are pegged to the value of the US dollar. Such coins are protected against the instability of the cryptocurrency market. Tether (USDT) and MakerDAO (DAI) coins are some of the critical stablecoins.Customer data must be protected at all costs, and that is something legacy finance cannot entirely guarantee since it is prone to hacks due to its centralized nature. In a blockchain, all the data is encrypted and is publicly available to validation. This does not mean that your data is out in the wild. Unlike banks, DeFi does not require you to identify yourself. The entire system supports anonymity and yet provides security as no one will be able to alter data. In 2019, Capital One fell prey to a hacking attack that exposed over 100 million customers' personal information. Since DeFi is entirely transparent and anonymous, customers will feel much safer here. The anonymity might also open doors for money-laundering, so it will be challenging to come up with regulations.The Venezuela Hyperinflation is something so devastating that it almost rendered the currency worthless. A steep drop in oil prices and poor government policies led to the mass printing of new currency, which destroyed the economy and shot up inflation to over 1,000,000%. This was entirely caused by humans. Blockchain came to the rescue when people from Venezuela started sending funds as cryptocurrency to their friends and relatives in other countries. Such a problem can never occur in DeFi since new coins are minted based on the protocol and not by choice.MakerDAO is currently the darling of the DeFi world and has 1.09 billion dollars locked in its system. MakerDAO is a decentralized organization that allows the lending and borrowing of cryptocurrency and is built over the Ethereum network. It locks ETH as collateral in Collateralized Debt Position(CDP) and lends the DAI stablecoin with an attractive interest rate with complete security since a smart contract manages all this instead of a central authority. It is smart and also dangerous in a way that, in order to maintain the stable value of the DAI token, the collateral must always be at least equal to the amount of DAI borrowed. If the collateral value falls below 150%, a liquidation process is automatically initiated by the smart contract, and anyone in the network acquires the power to repay the debt. These people aren't so kind as to repay someone else's debt. They get 13% of the total debt taken from the initial borrower's locked funds. All this can be avoided by the borrower controlling the loan amount and the regularity of repayments. The liquidation is solely done to maintain the stable value of the DAI token. This way, it can remain a global currency that anyone can send and receive around the world. A lot of other players are catching up in this space, including Compound and Synthetix.<h3 id="what-s-next-for-defi">What's next for DeFi?</h3>DeFi will not replace traditional finance overnight, it's just taking its baby steps, and we have to wait until it can run. It might either overthrow traditional finance or coexist with it. The future where these two switch roles and traditional finance is looked upon as a mere option is inevitable.One of the significant challenges DeFi will face is regulation, and it's interesting to see how it will tackle this problem. COVID has turned the world upside down, and DeFi has taken advantage of it. The past few months have seen a surge in the adoption of Decentralized Finance. Mainstream companies are paying attention to DeFi and are working hard to tackle it, but DeFi seems to be growing strong.Cryptocurrencies are already being accepted as forms of payment in various stores and organizations around the world. DeFi should earn the trust of users to enter mainstream adoption. The tech has developed significantly, and developers are working on providing a better user interface to allow even grandmas to use it. The crypto community has dubbed 2020 the year of the "DeFi Renaissance." The topic of decentralization is, itself, pretty restricted to the tech community, and it has to cross that border for mass adoption. DeFi isn't going to take over the world in the next 4 or 5 years, but it's taking one step at a time, and each step is a giant one.

Ashwin Kumar R

DeFi is booming - Banking to be a thing of the past?

From the previous decades up to the early 2000s, international development was to be <a href="https://www.vox.com/future-perfect/2019/1/15/18182167/microcredit-microfinance-poverty-grameen-bank-yunus">propelled by microloans</a>. The objective was to lend small loans to individuals in developing countries to assist them in developing and also expanding their small businesses hence kicking poverty out of their families. Profits from the returned loans would then be used to lend to more individuals aiming at a very large number of families to do away with poverty.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image002.jpg" class="kg-image" alt loading="lazy"></figure>Many microfinance lending organizations began at those times. Very many organizations started to offer loans as potential donors and investors supplied funds to microcredit. By the end of 2013, there was a rise in the number of borrowers to more than 200 million. Accion US Network is an example of one such institution in the US. It is the largest nonprofit microfinance network in the US and works with people to help them grow their business. <h2 id="what-is-microcredit">What Is Microcredit?</h2>Microcredit is an extension of small loans to poor individuals who lack steady, verifiable, or collateral employment or credit history. In the US, it is generally for loans less than $50,000 to entrepreneurs who cannot borrow from a bank. It was designed to alleviate poverty by promoting entrepreneurship. Many of the beneficiaries of microcredits are illiterate individuals who lack the capacity and paper competence needed in the application of conventional loans.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image004.jpg" class="kg-image" alt loading="lazy"></figure>Microfinance is deemed to be part of <a href="https://www.investopedia.com/articles/07/microfinance.asp">microfinance</a>, although many times they are used interchangeably. It provides a variety of financial services, such as savings accounts for poor individuals.<h2 id="successful-examples-">Successful Examples:</h2>In 2009, an estimated 75 million individuals benefited from microloans that totaled to around US$38 billion. The repayment success rate ranges between 95%-98%, according to the <a href="https://en.wikipedia.org/wiki/Grameen_Bank">Grameen Bank</a> in Bangladesh in the early 1980s. A study found that more than half of US loan recipients escaped poverty in 5 years.Here are some of the successful most influential and largest microfinance institutions today:<h3 id="kiva">Kiva</h3>Kiva is a non-profit microfinance institution operating in the U.S and other 85+ global countries. It is headquartered in San Francisco and was founded in 2005. It uses <a href="https://www.investopedia.com/terms/c/crowdfunding.asp">crowd-funding mechanisms</a> and peer-to-peer methods of lending.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image008.jpg" class="kg-image" alt loading="lazy"></figure>It allows persons to directly lend to borrowers in other nations who don?t have access to the traditional financing sources. Financing for health services, education, and small businesses are interest-free.<a href="https://www.kiva.org/"> Kiva</a> has extended over $1.5 billion microloans to more than 3 billion borrowers in 2020. This platform has around 2 million borrowers and about 1.8 million lenders.<h3 id="grameen-bank">Grameen Bank</h3><a href="http://www.grameen.com/">Grameen Bank</a> is considered to be the origin of the modern microcredit then other banks introduced it despite the initial misgivings. The year 2005 was declared the International year of microcredit by the United Nations. By 2012, microcredit became very common in developing nations. It was presented as an enormous tool of poverty alleviation with a focus on feminization poverty.The bank utilized a form of peer group pressure that helped in ensuring every individual was fiscally responsible. The borrowers were supposed to be groups of fives with the other community members who also needed loans.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image010.jpg" class="kg-image" alt loading="lazy"></figure>The groups capitalized on ideas of social capital and the notion that the communities have behavioral modes, networks, and links that would encourage individuals to repay their loans.Generally, the loans were sequentially issued and had a weekly or biweekly repayment period with very low rates as possible. In 2006, Grameen Bank and <a href="https://www.investopedia.com/terms/m/muhammad-yunus.asp">Muhammad Yunus</a>, the founder, were awarded the Nobel Peace Prize for pioneering in that microcredit work.Currently, there are more than 7000 microcredit institutions globally lend around $2.7 billion to borrowers more than 17 million.<h3 id="brac">Brac</h3>It is another Microfinance Institution founded in Bangladesh in 1972. The institution offers a variety of services in different niches including education, human rights, economic development, and health.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image012.jpg" class="kg-image" alt loading="lazy"></figure>Micro savings services, housing assistance, grants, and small business loans are some of the services provided. <a href="http://www.brac.net/">Brac</a> is known to operate in many developing nations, from Haiti, Myanmar to the Philippines. It has more than 7 million borrowers, and in 2020 its gross portfolio profit has hit over $4 billion.<h3 id="accion-us-network">Accion US Network</h3><a href="https://www.accion.org/clients/accion-microfinance-bank">Accion</a> is an American nonprofit microfinance organization headquartered in New York. It is the largest and only national microfinance network in the US. Its mission is to give people the necessary financial tools they need to create or grow a successful business. It has made nearly 50,000 loans totaling over $450 million as of January 2014. It also lends over $3.7 million to small businesses a month. 97% of businesses remained open one year after receiving a loan from Accion despite challenging economic times.<h3 id="bank-rakyat-indonesia-bri-">Bank Rakyat Indonesia (BRI)</h3>This is the oldest Indonesian Bank founded in Jakarta in 1896. It is established to be one of the largest financial institutions in Indonesia, primarily operating in small-scale and as a microloans lender. <a href="https://bri.co.id/">This bank</a> is majorly owned by the government and has over 30 million clients doing business with the bank through its rural services posts and thousands of branches across South East Asia.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image014.jpg" class="kg-image" alt loading="lazy"></figure><h2 id="challenges-despite-success">Challenges Despite Success</h2>Microfinance faces operational, strategic, compliance, and operational risks, just like any other industry. There?re risks such as over-indebtedness according to the nature of the markets in which these micro-finance institutions operate that are very inherent and more prevalent to microfinance.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image016.jpg" class="kg-image" alt loading="lazy"></figure>Despite the way microfinance is excessively hyped, it does not provide a cure to poverty, but stable job opportunities do. In the journey to help the poor, the focus should not be investing in microfinance but supporting the labor-intensive large industries.A comprehensive study concluded that microloan tends to be more beneficial to the individuals above the poverty line because they are more willing to invest in new technologies that will generate income as compared to the individuals below the poverty line. These individuals only tend to secure a conservative loan that protects their subsistence, and they don't invest in fixed capital, new technologies, or hiring of the labor force.Another study in India about the limitation of entrepreneurship by credit constraints found that there are significant benefits among the ?gung-ho entrepreneurs? (individuals who established businesses before microfinance wave). The effects are unsatisfying to those who had no previous businesses (reluctant entrepreneurs).Model technology choices can generate dynamics matching the ones observed in the data in which the reluctant entrepreneurs only access a diminishing returns technology. In contrast, the gung-ho entrepreneurs can access to high fixed costs technology but with high returns.The chief executive of Basix, Vijay Mahajan, observed that microloans reduce the flow of cash to the poor, and even they do more harm than good due to the high-interest rates charged by some microcredit institutions. If the clients don?t earn higher returns on their investments than the set interests to be paid, then they will just become poor, not wealthier due to microcredit.<h2 id="failure-of-microcredit-in-south-africa">Failure of Microcredit in South Africa</h2>The international development community rushed to South Africa immediately after the end of the apartheid in 1994 to promote the microfinance model. They proclaimed that it would bring new dignity, incomes, jobs, and empowerment to the impoverished South Africans with high expectations of rapid progress.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image018.jpg" class="kg-image" alt loading="lazy"></figure>http://ignatianeconomics.blogspot.com/The result of this market-driven microcredit introduced to post-apartheid South Africa was destructive. It has caused severe damage to the South African society and the economy at large despite being lauded too much.Many investors have left that bloated microfinance sector as it is about to collapse, as argued by many users. The problems induced in the microcredit sector in South Africa were of two forms:First, it is an anti-developmental intervention, meaning that it supports the small scale income generating ideas, but in practice, it supports consumption spending. Its impact on South Africa is that it created a costly and risky way in support of the immediate consumption needs of the poor. There are very few poor people who can repay the microloans using their secure income streams, resulting in very high unemployment rates than it was before the apartheid period.The other major problem with the South African microcredit is the aspect of extensive commercialization. It was introduced in the microcredit sector globally to boost its financial sustainability. It?s estimated that about 40% of the workforce in South Africa is spent on debt repayments.The impoverished South Africans are now trapped in micro debts of unimaginable proportions. The individuals now realize that the objective of these private microfinance institutions wasn?t to help them uplift their lives out of poverty but to reap as much value from them within a short period before getting lost to other business fields.The South African microcredit models and supports have been discredited widely just like their counterparts in other parts of the world. It will be a very difficult task to alleviate the poor from the microcredit sector owing that the country even with the post-apartheid government, has official sanctions of exploiting the most bankrupt black communities.<h2 id="there-is-no-one-size-fits-all-solution">There is No One Size Fits All Solution</h2>In the microfinance sector, there is no one size fits all approaches in the promotion of poverty reduction, empowerment, and development. Practitioners of microfinance need to develop structured approaches on how their target beneficiaries may utilize the services designed to the demographic of the society.<figure class="kg-card kg-image-card"><img src="file:///C:/Users/8460P/AppData/Local/Temp/msohtmlclip1/01/clip_image020.jpg" class="kg-image" alt loading="lazy"></figure>A creative approach should be adopted that meets the financial service needs of the low-income community segments and the poor. Policies that provide the freedom to set payment conditions and terms for various borrowers are more beneficial to income-generating activities and businesses.The borrowers may be more financially empowered and disciplined by tailor fitting the repayment schemes to specific situations. It also reduces the risks of a borrower defaulting on their loan.Communities and practitioners should possess the virtue of saying no, particularly on conditions and terms that will negatively affect a person's ability to repay their loan, whether long or short-term.Erase the misunderstanding, learn the trade! According to Youngquist, a world vision official, addressing the misconceptions in such a manner that microfinance is perceived as an integrated social-developmental tool as it's supposed to be is a very good starting step. Microfinance implementation isn?t for all. The best avenue for success and real opportunities are offered by the development practitioners who have partnered with established microfinance service providers.Microcredit isn?t? a cure-all and a panacea intervention. Money alone can?t solve all the problems within a household or the community at large.

Geoffrey M.

Microcredit - Loose Change for Real Change.

The term ?platform? is generally used as a technology construct; however, we can also use the term as a business model. Platform business models are dominating the banking industry. Hardly a recent phenomenon, platform strategy can be described as a ?Plug-and-play business model that allows multiple providers and consumers to connect, interact, and create an exchange value.? To successfully be a platform, a company must do three things. The first is to attract the proper providers, those with the most attractive products or services, and their suitable customer base. The second is to create a mechanism for matching those clients to their providers and supplying a way for providers to reach out to their customers. Thirdly, a platform should provide a toolkit that can enable the providers to plug into the platform and to assimilate with the client base. There are, at a minimum, five kinds of digital platforms currently dominating the banking industry. The first of these digital platforms is an Application Programming Interface (API) Toolkit. Scores of Megabanks have a developer hub, exchange, or portal that gives third-party access to apps for those apps to integrate or extract data about the client base. For instance, One South American megabank has four API kits for various banking activities, from ID verification, money movement, account origination, to debit card management. This bank, however, concentrates too much on the technology side and can?t really be considered a right platform. The second is marketing platforms. It can do several different things like integrating data from various sources, provide demand generation, servicing and liquidity management, etc. The next are analytics platforms that generally come in two types; use-case specific or generic. An example of use-case specific is X-sight, which is a cloud-based crime risk analysis platform, which enables financial institutions to manage and use data from multiple sources. An excellent generic analytics platform example is a CU Analytics Platform, which creates a community of data scientists, users, and app developers. The fourth is business banking platforms. An example of this platform is some of these platforms are cloud-based API platforms that leverage APIs to permit the banks to provide a more comprehensive set of banking products and services to their clients. Lastly, there are core integration platforms that allow banking institutions to integrate their auxiliary systems more closely with their core systems. Some of the implications of the dominance of banking are that platforms and openness are not synonymous, that platforms will change the relationship between banks and the way they gain and use technology and the downside of over-personalization. The latter being the most dangerous as it is partnered with data sharing, which can have some adverse side-effects, and further tip the balance of power away from the clientele. Even considering the harmful side-effects, we must accept that platforms are the way of the future for banking and can offer a vast array of services and are solidifying a permanent place in how we interact with our financial institutions.

Techfastly Team

How FinTechs Are Eating Banking for Breakfast?

Premium reporting on technology, startups, VC funding, and software from Techfastly tagged with banking. Read about trends and strategies for banking.

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