Anyone familiar with the crypto world must have often heard these two terms: Proof-of-work (PoW)&nbsp; and Proof-of-Stake (PoS). These two key components of blockchain are essential to validate cryptocurrency transactions. Most cryptocurrencies are not issued or controlled by central banks; this decentralized nature of cryptocurrency is often believed to be its main benefit. However, without a central authority to verify transactions, there can also be issues with counterfeit cryptocurrency.Let’s talk about what a consensus mechanism is, its various types, and pros and cons of PoW and PoS. &nbsp;<h2>What is a Consensus Mechanism?</h2>For any centrally administrated system, like a database of driving licenses in a country, one central administrator is responsible for the maintenance and updates of the database. This responsibility includes making any updates - like adding or deleting certain people who are qualified to receive certain licenses. In this way, the duty of maintaining legitimate records remains with the central authority, which remains solely in charge.Public blockchains that operate as decentralized systems on a global scale don't have any single authoritative figure. Contributions from hundreds of thousands of participants help to verify transactions and authenticate contributions on the blockchain, which includes block mining activities.In such an ever-changing system, we need to ensure that all happening on the network is authentic and that all parties agree with the consensus regarding the status of the ledger. The consensus mechanism handles this key task: it's a set rule that decides on the legitimacy of participation from various contributors (i.e., nodes or transactors) from around the network.&nbsp;<h3>Types of Consensus Mechanisms</h3>There are several consensus mechanisms developed and used, each with their own advantages and disadvantages. The mechanisms differ in how the verification of transactions is rewarded. Mentioned below are the various types of consensus mechanisms:<img src="https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/fcaaa01f-539e-4f14-95eb-a5582b1562ae.png">Let’s understand the two common consensus mechanisms in detail: &nbsp;&nbsp;<h3>Proof of Work Mechanism (PoW)</h3>Proof of work is a mechanism that was conceptualized way before the creation of crypto assets. Proof of work, also known as PoW, has been around since 1993 when it was first introduced by Cynthia Dwork and Moni Naor. It was Markus Jakobsson who coined the term in the year 1999.Proof of work is the first consensus mechanism proposed, but even after many years of operation, it is nowhere near perfect. This did not stop it from being the most dominant consensus mechanism that most of the cryptocurrencies in circulation use to date. It was first introduced in Bitcoin by Satoshi Nakamoto in the 2008&nbsp;<a href="https://bitcoin.org/bitcoin.pdf">Bitcoin Whitepaper</a> (The algorithm was previously used in Adam Back's HashCash).It is an energy-intensive consensus protocol which requires miners to compete against one another to solve complex cryptographic puzzles using high-powered computers. The first to come up with a 64-digit hexadecimal number (hash) earns the right to form the new block and confirm transactions. The successful miner is rewarded with ‘block reward’, a predetermined amount of crypto.The mechanism is secure, but it is still vulnerable to a 51% attack. In layman's terms, 51% of the nodes in the network decide to be on the evil team to steal money by taking the blockchain network hostage. They control more than 51% of the computer power that is used for mining in the network. This is unlikely to happen in large-scale cryptocurrencies but smaller altcoins like Bitcoin Gold have been subject to this attack in the past.The major downside for PoW is that it requires a lot of computational resources and energy. It also has limitations on scalability because it's difficult for new miners to compete with existing ones that have large infrastructure costs. &nbsp;<h4>Pros and Cons of PoW Mechanism:</h4>&nbsp;Pros of Proof of Work model:<ul><li>Miners are rewarded with a block reward and a share of the transaction fee.</li><li>It leads to more decentralized networks.</li><li>The network gets difficult and costly to attack.</li></ul>&nbsp;Cons of Proof of Work model:<ul><li>It is not insulated to 51% attack.</li><li>A lot of computational power is wasted once the equations are solved.</li><li>An excessive amount of electricity is consumed, which could impact the environment in the near future. &nbsp;</li></ul><h3>Proof of Stake Mechanism (PoS)</h3>Proof of Stake was created to address the mining process's energy consumption problem in a Proof of Work system. Sunny King and Scott Nadal introduced it in 2012.This mechanism does not involve miners, and there is no need for high computational power, making it a greener alternative to Proof of Work. The creators replaced the mining process with something called "staking." Instead of mining a block, the responsibility of creating a block is given to a user in a deterministic way, depending upon their stake (the amount of coins the individual owns). The individual with a higher stake has better chances of being chosen as the validator and will receive more staking rewards. This does seem pretty unfair as it allows for a centralization-like situation.This brings us to another problem, similar to the 51% attack. Rather than contributing to 51% of the network's computational resources, you now have to own at least 51% of the coins in a network. This seems dangerous, but it is highly unlikely for anyone to trust a coin so much.Unlike in Proof of Work, no new coins are minted. The validators are only paid through transaction fees where the rewards are from coins that were already created.There are a few other issues with Proof of Stake like initial distribution of coins, monopolization, and the nothing at stake problem. All these issues were addressed in 2013 by the creation of Peercoin. Proof of Work turned heads majorly when Ethereum 2.0 announced that they are moving to a Proof of Stake system.<h4>Pros and Cons of PoS Mechanism:</h4>&nbsp;&nbsp;Pros of Proof of Stake model:<ul><li>Theoretically, insulated to the 51% attack.</li><li>Better rewards to the validators.</li><li>It does not require a lot of computational power, thus is more energy-efficient. &nbsp;</li></ul>Cons of Proof of Stake model:<ul><li>It is less secure as compared to PoW.</li><li>It is more susceptible to low-cost attacks</li><li>It leads to a less decentralized network.</li></ul>&nbsp;<h3>Proof of Work Vs Proof of Stake</h3>Energy ConsumptionAs already mentioned, Proof of Stake tackled the power consumption problem and adopted a greener mechanism. Due to mining farms setup around the world to mine cryptocurrencies, this practice's energy consumption shot up like crazy.Study reveals&nbsp;<a href="https://doi.org/10.1016/j.erss.2020.101721">Bitcoin’s electricity consumption is underestimated</a>&nbsp;and finds the network ‘represents close to half of the current global data centre electricity use’. This is alarming. It is good to see that the future of cryptocurrency is moving towards PoS which requires only a small fraction of the energy.DecentralizationEven though PoS is the future, it does have its flaws. In comparison, PoW is more decentralized since the validator being chosen does not depend upon the number of coins owned. Not everyone will want the overhead of becoming a miner.In the case of PoS, the validators neither have to spend on mining equipment nor have to pay electricity bills. All they need to have is some cryptocurrency, which they keep staking. This leads to centralization as the coins are with the same person instead of a miner who will have to cash in some cryptocurrency to pay the electricity bills.The PoW mechanism results in better distribution of coins and maintains the decentralized state of the network more fairly.SecurityProof of Work is a tried and tested mechanism. It has shown its strength with Bitcoin, and the world is witness. Since Proof of Stake is relatively new, it just can't be used without a lot of testing.The problem with PoS is when a blockchain is forked due to some reason. Validators can validate transactions of both the chains without any consequences. This can be exploited to created multiple forks of the same blockchain. It introduces the problem of double spending where the coin spent in the original chain might not be added to the forked chain. Even though solutions have been proposed to solve this problem, it is not yet convincing from a user's perspective.PoW is comparatively safer since miners will have to decide to split their mining power to the original and forked chain but are unlikely to do so as the low mining power resulting from the split will not be enough for mining.<h3>Difference Between Proof of Work (PoW) and Proof of Stake (PoS) in Blockchain</h3><img src="https://iaxds62ruoojbg1k4180.cleaver.rocks/images/posts/37147acb-8429-468a-8f6e-ab8b25fc04cb.png">&nbsp;<h2>Conclusion</h2>The blockchain ecosystem must remain secure. Both the consensus mechanisms are viable to secure the network. It depends on the developer as to which mechanism should be implemented for the security of the ecosystem.&nbsp;If a miner misbehaves, it will result in being cut off economically or financially from the network. Punishing the misbehaved users is a crucial act to prevent cheating in the blockchain ecosystem. In theory, it is much cheaper to attack a Proof-of-Stake blockchain. Although, there have been several upgrades in the Proof-of-Stake mechanism to make it more secure.The favoritism is towards the Proof-of-Work mechanism; however, it is difficult to mention which one is better. Both the algorithms are accessible to all the users and focus on preventing cheating. The choice could be challenging and may depend on the costs and centralization. &nbsp;

Ashwin Kumar R

Proof-of-Work and Proof-of-Stake are two different ways of validating transactions on the blockchain. Our article offers an overview to help you understand the difference.

Proof of Stake vs. Proof of Work | Techfastly

Proof of Stake vs. Proof of Work

Every good thing has an unintended consequence, and the digitalization of the finance industry is no exception. The fintech industry is expanding at a breakneck pace to meet customer demands and provide them with online services. However, this demand has increased the likelihood of cybercrime.Online banking has made money more accessible, and criminals have taken advantage of this opportunity to launder illicit funds and fund terrorism at a faster and larger scale around the world. And, with the amount of data available in the world, particularly in the financial industry, it is impossible to detect fraud by manual techniques.To combat the drawbacks of digitalization, artificial intelligence is being used as a digital weapon to detect financial fraud and make online banking a more secure option for everyone.<h2 id="using-ai-for-anti-money-laundering-aml">Using AI for Anti-Money Laundering (AML)</h2>Artificial intelligence and machine learning are two dynamic fields of study that adapt intelligently to market changes and detect emerging risks. They can be quickly and painlessly integrated into existing compliance programs. Early adopters are gaining significant efficiencies while also assisting their institutions in meeting rising regulatory requirements.It is necessary to understand the risks first before implementing any solution. Money mules, who are recruited to move funds, knowingly or unknowingly, as part of a money-laundering scheme, or Smurfing, which involves moving large sums of illicit money through a series of smaller transactions, are examples of the dangers. These refined money launderers pose a serious threat to financial institutions around the world, and their activities have far-reaching societal consequences. As a result, socioeconomic disparities such as terrorism, drug trafficking, and human trafficking pose a threat to social structures and order, as well as open and fair trade.Using specialized algorithms, AI tools can detect money laundering in a variety of ways. In essence, these algorithms analyze large amounts of data and raise a red flag if anything suspicious is discovered, such as unusual transactions or account activity. Here are a few ways in which AI can detect suspicious behaviour:<blockquote><ul><li>AI can also help with customer due diligence and know your customer processes, allowing them to be completed more quickly and thoroughly.</li><li>For AML purposes, AI can provide financial institutions with a wider range of customer data that can be used in risk assessments, suspicious activity reports, and investigations.</li><li>When dealing with potentially suspicious activity, algorithms can be used to pre-fill reports with relevant data and standardize language and terminology, saving AML employees valuable time.</li><li>Financial institutions can use AI to manage their massive amounts of unstructured data. Banks must be able to analyze their unstructured data as part of transaction monitoring, sanctions screening, and other activities to be AML compliant.</li></ul></blockquote><h2 id="challenges-involved-in-aml">Challenges Involved in AML</h2>Traditional financial institutions have had years to develop their anti-money laundering (AML) programs, gradually adapting to changing regulatory requirements. FinTech are catching up and attempting to scale their resources and technology to meet the demand for their services while remaining compliant with regulations. Here are some of the challenges that fintech companies face when implementing AI.Digital banks require actionable insights quickly to develop and improve their anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks, but they face some significant challenges in ensuring AML compliance. The Financial Conduct Authority (FCA) announced in 2021 that it was investigating Monzo for possible non-compliance with AML/CFT regulations, which should indicate that Fintechs are being given more attention. To begin with, their reliance on online banking makes them vulnerable when it comes to approving an account or transaction, necessitating risk assessment procedures. Then there's the massive amount of data that needs to be processed quickly, which includes a variety of data types ranging from IP and geolocation data to other personal information obtained from apps and digital devices. It's difficult to sift through so much data to find actionable, relevant, and timely insights, especially when compliance processes are typically repetitive, data-intensive, and inefficient.<h2 id="using-ai-to-drive-efficiencies-in-operational-hotspots">Using AI to Drive Efficiencies in Operational Hotspots</h2>Modern AI techniques can sift through massive amounts of data collected across various bank departments, effectively replacing manual investigation. This enables the modern bank to investigate literally every transaction that occurs in a fraction of a second, particularly in these areas.These compliance processes can be automated with AI solutions, including:<h3 id="identity-verification">Identity verification</h3>Verification checks and KYC procedures are essential for ensuring that your customers are who they claim to be. To identify AML risks with high accuracy and at the earliest opportunity, banks must understand how to contextualize relationships between individuals and business entities.This could include biometric data and scans of official documents as part of digital identity verification. Additional measures, such as a video KYC check, can be implemented because some fake documentation appears to be very convincing.Banks should consider the benefits of slowing down onboarding to reduce the risk of hasty and inaccurate approvals. Banks will be one step ahead of the competition by incorporating layers into the initial scoping process.<h3 id="monitoring-the-activities">Monitoring the activities</h3>Customers must also be accurately and efficiently screened against international sanctions and watch lists by digital banks. They must also be able to recognise and track changes in the status of politically exposed persons (PEPs) and their family members and close associates.<h3 id="monitoring-transactions">Monitoring transactions</h3>It is critical to track and understand customer transactional behaviour to ensure that it is consistent with expectations. Suspicious activity, such as unusual transactions completed at unusual frequencies or volumes, or transactions involving high-risk jurisdictions, necessitates constant vigilance.<h3 id="conclusion">Conclusion</h3>Over half of respondents have integrated AI or machine learning into their AML compliance processes, are piloting AI solutions, or plan to implement them within the next 18 months. The two main reasons for using AI and ML in AML processes are to improve the quality of investigations and regulatory filings, which is cited by 40% of respondents, and to reduce false positives and associated operational costs, which is cited by 38%. In this article, we have discussed how AI helps in detecting money laundering and makes the fintech industry secure for online transactions.

Bhumika Dutta

Artificial Intelligence Against Money Laundering

With futurists looking to re-invent the asset management value chain and consumers demanding more client-centricity, can tomorrow's wealth management solution be led solely by tech? Digitalization is promising a massive upgrade to long-term financial planning. What can this mean for you as an investor? An investor usually has two broad objectives: to grow their capital and, second, to protect what they already have. But such seemingly simple goals can face some tirelessly complex hurdles. From trying to understand asset classes and keeping track of portfolio performance to changing investment buckets based on market trends, an average investor often has a lot to contend with. Combine this with increased uncertainty and the rising cost of risk, and you have a consumer who is frayed at the edges and is demanding a lot more in the way of client-centricity. As per a report published by Deloitte in 2017, we are about to witness the largest wealth transfer in history over the next 40 years, with almost USD 50 trillion changing hands from one generation to another. This makes it even more essential for institutions to gear up to address re-wired Millenials' demands. With increased globalization, it's vital to recognize that digital transformation is no longer a choice but an imperative for sustainability. This is something wealth managers have now realized. Risking disruption to re-invent their value-chain, wealth management is now following in the footsteps of consumer-centric organizations like Amazon, Apple and Netflix, to name a few; to empower a digitally-savvy investor with tools and methodologies that up until now were the purview of a select few. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">The Emergence of Wealth Tech</h2>Just as fintech transformed financial services, Wealthtech promises a revolution in the investment management industry. It encompasses a range of different channels - from B2C robo-advisors to micro-investing platforms that allow users to regularly save small sums of money to even B2B providers that offer digital brokerages and wealth advisory. Wealthtech is attempting to create a fully&nbsp;operational wealth management bank 'in your pocket'.With cutting-edge technology, firms like Wealthfront, Addepar and InvestCloud are helping investors benefit from Artificial Intelligence (AI) and deep-data-driven analytics to receive real-time personal financial management at a fraction of the cost. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">No Longer A One-Size-Fits-All</h2>Thanks to Machine Learning, advisory firms are infusing data and analytics to serve clients holistically by generating relevant, timely, and actionable insights for clients and advisors alike.Embedded at the heart of Wealthtech is a behaviour-based segmentation based on risk appetite, interests, and financial goals. This brings a more intuitive experience to the investor, going beyond just recommending portfolio allocation based on risk profile or asset under management (AUM). Instead, more customized offerings are made available based on client personas and interests. With this outside-in approach, technology is bridging the chasm between business objectives and customer expectations. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Taking Robo-Advisory To The Next Level</h2>But as consumer sentiment evolves, the new generation of wealth customer is looking beyond just growing their capital. With urbanized goals like sustaining a lifestyle, education planning for kids, healthcare costs of ageing parents, or even buying a new home, today's consumer needs more appropriate real-time advice than ever before. This is perhaps where traditional wealth management has sometimes fallen short of its objectives. With analyst, stock picks undermining market indexes more often than not, and underdog plays making headline-worthy moves, advisors often find themselves dragging their feet when it comes to generating timely advice and meeting client goals. For Wealthtech innovators, this is a core focus area - bringing granular level needs-based advisory, real-time, to the mass market. By integrating economic trends and even social media analytics, whose singular stand in recent times has moved markets beyond measure, this type of advice becomes more relevant than ever.&nbsp;Combining this with click-of-the-button UI, Wealthtech brings in user-friendly omnichannel support to simplify investing and at the same time, give control back to the investor. For instance, an investor can individualize their financial planning through goal-based bucket creation to set aside a long-term retirement corpus while having an aggressive short-term bucket for saving up for a down payment on a house. If there are changes in market sentiments in the short term, the investor can shift money from one bucket to another. This is perhaps the most significant takeback from this value chain: more control, better individualization and better expectation management. Taking it a step further, a personalized dashboard gives you 24/7 access to your portfolio with the ability to compare performances across different asset classes ranging from commodities, mutual funds, energy, real estate, and even art. But where does this leave the traditional human element of financial planning advisory? <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">The Convergence of Tech And The Human Element</h2>Wealth management has been a long-standing stalwart of a personal advisory model. But algorithms are slowly taking some of the more fundamental functions of human advisors. However, that doesn't entirely render the human element obsolete. On the other hand, it augments the offerings while still retaining the traditional model's personal and emotional component through a more hybrid approach.&nbsp;Human advisory's significance is invaluable for clients with material assets to invest in, or even when it comes to tax planning and estate management. This is why the digitalization of the Wealth Management space is so unique. The pairing of the human relationship with automation to create an omnichannel service makes financial planning a lot more approachable for the masses. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Wealth Management 2.0</h2>The paradigm shift in the wealth management landscape is occurring rapidly, and these digitalization trends bear testament to the massive change that the wealth management space is facing. With the gamification of UI, the enormous shift in demographics now controlling wealth and the new and digitally re-wired customer at the helm, Wealthtech seeks to bring far-reaching changes to a system that up until was the purview of a select few. We, for one, are excited at the potential of this change.Welcome to Wealth Management 2.0.

Barkha Sheth

The Future of Wealth Management? Tech or Hybrid?

<div>Cloud operational management is frequently decentralized. The FinOps framework addresses these problems, as well as others related to cloud financial management. Cross-functional teams from IT, DevOps, and finance collaborate with FinOps to handle cloud expenses throughout the organization. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">What is FinOps?</h2>FinOps, a methodology for managing Opex throughout an enterprise that combines the phrases 'finance' and 'DevOps,' is frequently used in conjunction with the cloud and cloud computing. Operating expenses, sometimes known as "opex," are the costs incurred by a firm for its daily operations. In other words, opex is the cost incurred by a business to carry out its daily operations. By assisting cross-discipline teams in working together to make the best decisions possible regarding performance, quality, and cost in technology investment and execution decisions, particularly regarding cloud decisions and usage, FinOps goes beyond the simple goal of saving money and strives to drive revenue. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Key Market Drivers for FinOps</h2>Here are the key market drivers for FinOps: <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">FinOps lowers idly-spent cloud money</h3>According to the most recent projections from analysts and vendors for 2022, 32% of all cloud spending is lost, or 32 USD for every 100 USD spent on cloud services. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">FinOps controls expenses across several clouds</h3>90% of businesses worldwide use several clouds. Traditional cost management systems offered by CSPs and hyperscale companies like AWS, Azure, and GCP support just their own cloud and do not provide cloud cost management across other clouds. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">FinOps increases end-user demand for cloud spending optimization</h3>Demand for timely data on cloud spending and responsibility for the cloud spending with related business value realized is rising. FinOps/Cloud Management Platforms (CMP) that may be used to optimize cloud spending across all cloud environments are in high demand by organizations. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">FinOps modifies operational models as a result of escalating cloud spending</h3>The IT and Finance teams must work more effectively together to enhance the business's agility and actively monitor and respond to spending. Teams will be able to benefit from the cloud's flexible cost model as a result. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Main Principles of FinOps</h2>The main principles of FinOps are as follows:<h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Working together across teams</h3>Your company may need to undergo a cultural transformation as a result of FinOps since teams will no longer function in silos. FinOps improves team communication and can assist your business in setting up sound procedures for cloud financial management. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Make choices based on the business value of the cloud</h3>Developers may improve the distribution of their business features thanks to the cloud, which offers various advantages. Teams can scale, easily supply resources with no upfront cost, and use managed services thanks to this. FinOps involves more than just keeping track of cloud expenses; it also entails making choices that will raise the cloud's commercial worth. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Put together a centralized FinOps team</h3>A centralized FinOps team that oversees your cloud strategy and cost control is necessary. This team should also establish goals for cost efficiency and instruct engineering teams on best practices and industry standards. Utilize the knowledge of your FinOps team to build tools and dashboards, construct budgets and cost projections, set guardrails for cloud cost control, and set standards for cost tagging. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Take responsibility for cloud usage</h3>Your business should hold each team accountable for the cloud expenses associated with the resources and products it owns. You must manage team-level expenses and have comprehensive visibility into spending to determine where costs might be more effectively optimized.&nbsp; The teams and programmers responsible for developing resources and producing goods ought to be made liable for their cloud expenses. They are responsible for workload-level cost efficiency, have rightsizing options, and have decommissioning authority for unneeded resources. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Create FinOps reports that are simple to access</h3>Engineering teams should have real-time access to cost information so they can monitor their cloud expenditures. Teams will be better able to anticipate and monitor the cloud consumption of their products if they have access to cost dashboards. Anomaly detection should also be included so that teams are immediately alerted when an odd occurrence occurs. This is essential to guarantee a quick feedback loop and better decision-making. <h3 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Use the variable cost model of the cloud to your advantage</h3>It is simple to deploy additional resources in the cloud. You simply pay for the resources you really utilize; there is no upfront fee. However, you must be cost-conscious and make sure that you make the most use of your present resources. Ensure that your actual expenditures match your budget projection by regularly monitoring resource usage. Follow cost optimization techniques, including rightsizing resources, buying reserved instances, and shutting resources off when not in use or in development/sandbox environments to reduce your cloud expenditures further. <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;">Bottom Line: Should Your Organization Adopt FinOps?</h2>As major companies with significant cloud use require systems and procedures throughout the company to manage, monitor, allocate, and anticipate cloud spending, the profession of FinOps is growing. Your company will need to adapt its culture and continually iterate through the lifecycle phases as part of the FinOps journey. Obtaining widespread executive support and buy-in to commit the time and resources necessary for the culture transformation is one of the largest obstacles to launching a FinOps practice.&nbsp; <p dir="ltr" style="border-color: rgb(229 231 235/var(--tw-border-opacity)); --tw-translate-x:0; --tw-translate-y:0; --tw-rotate:0; --tw-skew-x:0; --tw-skew-y:0; --tw-scale-x:1; --tw-scale-y:1; --tw-transform:translateX(var(--tw-translate-x)) translateY(var(--tw-translate-y)) rotate(var(--tw-rotate)) skewX(var(--tw-skew-x)) skewY(var(--tw-skew-y)) scaleX(var(--tw-scale-x)) scaleY(var(--tw-scale-y)); --tw-border-opacity:1; --tw-ring-inset:var(--tw-empty, ); --tw-ring-offset-width:0px; --tw-ring-offset-color:#fff; --tw-ring-color:rgb(59 130 246/0.5); --tw-ring-offset-shadow:0 0 #0000; --tw-ring-shadow:0 0 #0000; --tw-shadow:0 0 #0000; --tw-shadow-colored:0 0 #0000; --tw-blur:var(--tw-empty, ); --tw-brightness:var(--tw-empty, ); --tw-contrast:var(--tw-empty, ); --tw-grayscale:var(--tw-empty, ); --tw-hue-rotate:var(--tw-empty, ); --tw-invert:var(--tw-empty, ); --tw-saturate:var(--tw-empty, ); --tw-sepia:var(--tw-empty, ); --tw-drop-shadow:var(--tw-empty, ); --tw-filter:var(--tw-blur) var(--tw-brightness) var(--tw-contrast) var(--tw-grayscale) var(--tw-hue-rotate) var(--tw-invert) var(--tw-saturate) var(--tw-sepia) var(--tw-drop-shadow); margin-top: 0pt; margin-bottom: 0pt; line-height: 1.38;">FinOps holds the key to realizing the potential of cloud computing, and we see a future in which senior leadership, engineering, and finance work together to create productive, lucrative, and cost-effective cloud systems.</div>

Managing Organizational Performance With FinOps

Fin-Tech has brought numerous innovations to advance the business and banking world. Accounting software is one of such revolutionary tools that can scale up your business game. As we know, accounting is a critical pillar of any business. However, you cannot deny that it is a complex and challenging job. Taking this into account, businesses are now incorporating accounting software into their team.You will be amazed how quickly you can pull off all the tedious tasks with it. Besides this, it can simplify all your bookkeeping processes including invoices, transaction-tracking, decision-making, and reporting.Well! There are many reasons why it can act as a trump card for your business productivity. Here I will be discussing 7 ways it can power your business and keep you ahead in the growing competition.<h3 id="1-business-intelligence-for-reporting">1. Business Intelligence for Reporting</h3>The accounting software uses Business Intelligence (BI) technology to analyze the data for effective decision-making. Business reports are crucial for maintaining your financial health. They help you track performance, flag issues, and take decisions accordingly. Then you can map out better plans and strategies to increase your revenue. Furthermore, if you have proper reports, you can breeze through tax filing and loans processes without any worry.But you need to compile, compute and calculate data for all these. It is indeed a long challenging process. However, you can lighten your head using BI technology. Most of the software offers a dashboard that is both informative and interactive. The dashboard includes tables, graphs, reports, KPIs, and all the metrics to monitor your financial standing.It shows all the transaction records, financial statements, and reports at your fingertips. You can also track cash flow, inventory, assets, sales, exchanges, and almost everything in it.<h3 id="2-save-your-time">2. Save Your Time</h3>Technology coupled with automation gives you the privilege to accelerate the processes and save hours for better things. Repetitive tasks like invoicing, payment reminders, journaling, calculations, and data entry can be time-taxing.But a businessman should invest time in new ideas, strategies, customers, and sales rather than wrestling with sheets. With the new age software, you can automate almost all such tasks. Everything is organized and automated so you can relax and see your work getting done.<h3 id="3-secure-your-business-data">3. Secure Your Business Data</h3>Data security is a matter of concern even for big firms like Google and Facebook and so definitely for small businesses. Any data breaches or data corruption can prove to be very costly and time-consuming for you. Additionally, this can also affect your reliability as a brand. So you should be careful about your transaction records and customers? data.Fin-Tech can shield your business from such risks. It provides a convenient defence system to prevent serious risks using various technologies:i)Tokenization: This method uses special words or symbols instead of original sensitive information.ii)Encryption: It converts the normal readable text into ciphertext. The ciphertext is the random code that only authorized users can decrypt. It means only those who have confidential keys or passwords.iii)Cloud storage: It is based on cloud computing technology. It saves your data on the internet (remote servers) and lets you access it via the internet or a dedicated private network.They are much better than sensitive storage mediums like hard drives, selves, and even spreadsheets. Further to this, automation also makes things safer from manual interference. With this software, you can carry on your transactions and tasks without worrying about any cyber threats.<h3 id="4-accessibility-anywhere">4. Accessibility Anywhere</h3>It won?t be wrong if I say, technology has free up human beings from limitations. Gone are the days when you had to be tied to your desk and cupboard to control your finances. Now, a cloud storage system lets you access the business from anywhere and anytime.Whether you are in a flight, caf?, bedroom, or office, you can carry all the data and documents in your pocket. You only need a device to be it an android phone, tablet, or laptop to check your financial reports, send invoices, track inventory, receive payments, and do many more tasks.<h3 id="5-reduce-errors-and-improve-accuracy">5. Reduce Errors and Improve Accuracy</h3>A major part of accounting tasks involves data entry and calculations. There are records to add, modify and compute. An accountant or businessman must be aware of the struggle when balancing takes hours just because of a minor error. We know it well that manual methods are subject to mistakes.However, the advent of automation has gifted us an errorless work environment. Accounting software uses machine learning and artificial intelligence to monitor your actions. In accounting software, AI can correct errors as per your previous data. It can also auto-modify your financial statements. On top of this, calculations of totals and taxes are no more on your shoulders<h3 id="6-easy-invoicing-system">6. Easy Invoicing System</h3>Invoicing plays a crucial role in timely payments and maintaining the cash flow. Some prefer to use excel or word or even hand to create invoices. It can be enough for a few customers. However, if you are dealing with a lot of customers, it can result in errors, design inconsistencies, and a huge time sink.Accounting software can make invoicing a cakewalk for you. You can create well-structured and accurate invoices in just a few minutes. Plus it is packed with many amazing features:<ul><li>Customize the colour, font, fields, and logo to give you brand look.</li><li>Send/download the invoice directly from the software</li><li>Invoice templates for different industries</li><li>Track paid/unpaid invoices</li></ul>The accounting software is not limited to just invoicing. Some of them also include other documents like quotations, export invoices, estimates, proforma, and many more.<h3 id="7-backup-system">7. Backup System</h3>Another perk of cloud-based software is a backup system. Traditional storage is not only prone to data loss but very expensive too. In contrast, the computerized method allows you to save all your financial data safely with backup. You can also set automatic backup in small intervals so you can restore data anytime. It let you backup both online as well as in local drives.

Gayatri Barnwal

7 Ways Fin-Tech Accounting Software Can Empower Your Small Business

Increased cryptocurrency-related scams, data breaches, and more widespread frauds and identity thefts are among<a href="https://www.crn.in/news/5-cybersecurity-predictions-for-an-eventful-2022-palo-alto-networks/"> Palo Alto Network</a>'s top cybersecurity predictions for 2022.Defining Fintech as the next stage of financial service innovation combines financial and technology. There are two main components of Fintech: technical breakthroughs in the traditional banking sector and the advent of new financial service delivery models. Fintech has disrupted all industry-banking, capital markets, investment, insurance, and funds transfer and payments. In addition to impacting start-ups, Fintech has disrupted the way traditional banks offer their services, as banks look to integrate multiple digital channels into an omnichannel customer experience.Financial services firms deal with sensitive information related to individuals and businesses. With Fintech, more data is available in digital format, making it easier to analyze and generate insights and more vulnerable to security breaches. In light of the growing number of services offered online, data ubiquity and data security are proving to be major challenges for Fintech. Outsourcing IT services and data to fintech firms present governance and control challenges and security risks. By 2022, the global information security market is expected to grow by 8.5% CAGR. (<a href="https://www.gartner.com/en/documents/3889055">Gartner</a>)Self-learning malware and artificial intelligence (AI) increase cyberattacks' sophistication, allowing cybercriminals to change how they strike. Notably, these hackers use increased phishing and malicious insiders to leverage the human layer?the weakest link?as a gateway to attack systems. In addition, other methods, such as those used by nation-states to target commercial businesses, are altering the nature of recovery, with insurance companies attempting to categorize cyberattacks as an "act of war" issue.Ever since COVID, fintech providers have become torchbearers in the world of digital financial services. However, the phenomenal rise in financial transactions has significantly increased UPI breaches and credit and debit card frauds.This article delves into the several types of cybersecurity risks in FinTech and the categories and individuals responsible for them.<h3 id="cybercrime-on-the-risehow-do-banks-counter-it">Cybercrime on the rise - how do banks counter it?</h3>In February 2016, hackers successfully stole approximately USD 100 million from <a href="https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery">Bangladesh's central bank</a>. Since then, fears of future cyber attacks on banks have grown. Russian Central bank officials confirmed hackers had stolen more than <a href="https://www.wsj.com/articles/hackers-steal-31-million-from-accounts-at-russian-central-bank-1480701080">USD 31 million</a> (two billion roubles) from commercial and central banks following the incident.Banks face increasing expenditures due to rising cybercrime rates since they are under pressure to reimburse their deceived consumers in bulk. Unfortunately, most consumers believe that their bank will cover the cost of successful scams regardless of the overall amount lost.Banks are now reimbursing authorized <a href="https://en.wikipedia.org/wiki/Authorized_push_payment_fraud#:~:text=Authorized%20push%20payment%20fraud%20(APP,social%20engineering%20attacks%20involving%20impersonation.">push payment (APP) fraud</a> at a rate of 46 percent on average, but measures endorsed by the government will soon oblige them to repay everyone. This is just one reason why, in 2022, banks must prioritize cybersecurity to protect consumers.Banks will need to collaborate with governments and industry organizations to share practical tactics. There must also be continuing efforts to educate the public about preventative measures. Still, the banks must ultimately ensure that security models are implemented that offer maximum protection for themselves and their customers.<h3 id="nuance-communications-biometrics-and-security">Nuance Communications: Biometrics and Security</h3>This year, financial services firms are turning to current AI-powered technologies, e.g., <a href="https://www.thalesgroup.com/en/markets/digital-identity-and-security/government/inspired/biometrics">biometrics</a>, to safeguard their consumers while providing them with a human-like experience.Speech biometrics helps determine a person's identity by identifying over 1,000 voice features, from pronunciation to the shape and size of the nasal passage.FS organizations can use technologies to verify that people are who they claim to be based on how people sound. In addition, authentication and personalization are possible with biometric engines in just a fraction of a second. This implies that agents may instantly recognize a customer and begin personalizing the engagement.Biometrics will also help financial services firms improve security. Customers don't have to remember anything specific or be concerned about their data being taken.<h3 id="bettering-the-onboarding-process">Bettering the Onboarding process</h3>Financial institutions need to perform holistic data checks during account opening and monitor customers throughout their lifecycle to combat this.While money mules may appear respectable on the surface during the onboarding process, they transfer the money to money launderers as soon as they access the account. Therefore, financial institutions and banks should use technology to verify that the customer is the account holder in a customer's lifetime.In addition, <a href="https://gdpr-info.eu/">GDPR</a> is the global norm for privacy regulation. Therefore, banks must choose a partner who can manage sensitive data and adhere to high standards to meet the requirements. Consequently, it is more attractive than upgrading procedures and internal systems.Lastly, society has become increasingly concerned about how technology companies use personal data. As a result, it will be up to banks to explain how artificial intelligence (AI) is used in fraud and compliance. This is important in vendor onboarding since it necessitates determining whether their vendors and partners entirely control the technology they are providing.The banks' responsibility will explain their decisions to the general public and regulators.<h3 id="the-future-of-bots-and-cryptocurrencies-in-2022">The future of bots and cryptocurrencies in 2022</h3>Bots will exploit business logic flaws in new sector verticals that were not previously exposed to massive bot attacks, as bots become a more common attack mechanism now.People interested in NFT profits have increased the demand for bot developers' services. As a result, NFTs are being bought and sold quickly using sniper bots, identical to those used on eBay. As a result, bot attackers will likely diversify more of their attack vectors to boost their revenues.Meanwhile, cryptocurrency will become a focus area for cyberattacks around the world. This is because large sums of money can be found on cryptocurrency wallets and exchanges, which might entice attackers trying to benefit from their exploits. As a result, cryptocurrency-related attacks have increased in the second half of 2021.<h3 id="the-proliferation-of-open-banking">The proliferation of Open Banking</h3>Although the United Kingdom was the first to do so, several other countries are now following suit. In addition, because most Open Banking systems are based on APIs and Web API queries conducted by financial institutions, we can expect more attacks against them.<a href="https://www.gartner.com/en/webinars/4002323/api-security-protect-your-apis-from-attacks-and-data-breaches">According to Gartner</a>: "API abuses will move from an infrequent to the most common attack vector, leading to data infringements for enterprise web applications."<h3 id="on-the-rise-mobile-banking-trojans">On the rise: Mobile Banking Trojans</h3>As a result of the pandemic's widespread acceptance, more mobile banking Trojans for Android, specifically RATs that bypass bank security measures, are likely to emerge. In addition, regional Android implant projects will spread throughout the globe, spreading attacks to Western European nations.Cybercriminals are increasingly targeting fintech apps due to the increasing volume of financial data they collectMany critical personal details are saved on mobile devices thanks to online payment systems and fintech applications. However, many cybercrime groups will continue to attack personal mobile phones using advanced methods such as deep fake technologies and advanced malware to steal data from victims.BNPLThe BNPL (Buy Now Pay Later) services (Clearpay and Klarna) exploded in 2021. Unfortunately, the ?4.1 billion some consumers owe these companies may never be repaid. The evil side of BNPL is expected to emerge in 2022, and the trend will be renamed "Buy Now Pay Never." Cash-strapped people are more prone to commit first-party fraud by using the services and collecting the products without paying back the loan.<h3 id="ransomware-that-is-aimed-at-specific-regions">Ransomware that is aimed at specific regions</h3>As international efforts are being made to crack down on large ransomware groups, we will see small groups originating in regional areas focusing on regional victims.<h3 id="dual-threats-deepfakes-and-autodialers">Dual threats: Deepfakes and Autodialers</h3>Deepfake assaults are predicted to increase. In 2022, employing AI to imitate the signatures of business leaders will become a more common attack vector. Voice analysis has increasingly become a security mechanism for financial institutions that threat actors have started to notice.This strategy was proven helpful at the end of 2021, with a $35 million theft from a bank in the United Arab Emirates. Banks and multinational investment firms should be aware of this and ensure that their security measures are not overly reliant on a single technological solution.<h3 id="threats-posed-to-online-payment-systems">Threats posed to online payment systems</h3>Due to quarantine and lockdowns, people rely more on internet markets and payment methods while they remain at home. However, adequate security measures do not accompany this rapid transformation, attracting many cybercriminals. This problem is severe in developing countries, and the symptoms will continue for a long time.<h3 id="final-words">Final Words</h3>In 2022, fraud is not seen as a subset of financial crime but rather as a subset of cybercrime alongside phishing, ransomware, and other sorts of cybercrime. As a result, it's been dubbed the spam moment in financial services.Generally, preeminent banks have developed specialized or tailored cybersecurity technologies that are not interconnected. Now, we're starting to witness a significant change in perception, with banks and other institutions purchasing product licenses and concentrating on integrating them. Rather than constructing everything from scratch, they use commercially available security, identity management, and fraud-related tools.

Hamid Akhtar

In An Evolving Fintech Landscape, There Are Security Challenges to be Faced

Extortion, fraudulent transactions, denial of service threats, and credit card fraud, have increased as a result of the development of digital wallet options. Several cyber-attacks on the financial industry have already resulted in serious damage to crucial economic infrastructure. Some of the most well-known targeted crucial economic infrastructure. These assaults can compromise important company data, which has a detrimental impact on services, in addition to causing hardware damage.Nearly every component of the FinTech ecosystem is likely to be impacted by a cybersecurity threat, either directly or indirectly. They could jeopardize financial institutions, FinTech businesses and users. Similarly, technology developers must be mindful of cyber dangers that could jeopardize the technology they are developing. There are several cybersecurity dangers in FinTech, and this article identifies different types and actors responsible for them, as well as threat modelling methodologies used by financial institutions to mitigate countermeasures.<h3 id="the-threat-of-cyberspace">The Threat of Cyberspace</h3>We've seen data theft, malware, denial of service, and cyber fraud, among other sorts of cyber dangers, in the field of financial technology. In terms of hazards and cyber risks, data breaches and distributed denial of service (DDoS) are the two most common attacks on FinTech companies around the world.Cyber-attacks have been launched against financial organizations and banks all around the world. There have been reports of recent cyber-threat attempts.<blockquote>Twitter accounts being hijacked for bitcoin (US)</blockquote><blockquote>dForce cryptocurrency (China)</blockquote><blockquote>Ransomware attacks (US)</blockquote><blockquote>GoldenSpy malware in tax software (China)</blockquote><blockquote>Scotiabank data breaches (Canada)</blockquote><blockquote>DDoS attacks (Europe)</blockquote><blockquote>DDoS extortion (Australia)</blockquote><h3 id="types-of-threats">Types of Threats</h3>For FinTech startups, cyber dangers are common, and this section identifies the most serious cyber concerns.Malware: It is a type of malicious software that is designed to damage, disrupt, or gain unauthorized access to a computer system in order to steal sensitive information. Adware, Ransomware, Scareware, Riskware, Trojan horse, Spyware, Virus, Worm, and Zero-day malware are among the several types of malware.Adware: Adware is a type of virus that shows unwanted adverts on the user's computer screen. Adware tempts the user to click on flashing advertising that promises profitable products.Ransomware: Ransomware encrypts data on a machine, rendering it inaccessible to users, and demands a ransom in exchange for access to the decryption key.Riskware: Riskware is a valid programme that can compromise the device's security. Despite the fact that it is legitimate software, it is used to steal data from the device or redirect users to dangerous websites.Scareware: Scareware's goal is to instil fear in consumers' thoughts in order to persuade them to download or acquire harmful software.Spyware: Malicious software such as spyware can gather sensitive information and pass it to advertisers, firms, or external agencies once installed on the device.Trojan: Trojans are sneaky impersonators that mimic legitimate programs and steal the data from the device in the background.Virus: In the computer world, a virus is a program that duplicates itself by altering other programs and inserting its own code.Worm: A worm is computer software that replicates itself and spreads to other computers without the use of a host programme. Worms infect other machines in the network with a target machine.Zero-day: An unknown vulnerability is called a zero-day vulnerability. When a vulnerability is unknown to the security community and a malicious application is created to exploit it, this is known as the zero-day period.Data Breach: A data breach occurs when confidential or sensitive information is leaked intentionally or unintentionally to an untrusted party.Denial of Service: A denial of service attack is one that targets an entire computer system, network, or server to render its services unavailable to legitimate users.Distributed Denial of Service: The Distributed Denial of Service (DDoS) has been described as a type of targeted and lethal attack involving multiple hackers and compromised systems.Threat actors: Individuals or groups performing cyber-attacks against organizations are known as threat actors. While the people behind the attacks are the same for every organization, financial institutions have a dedicated group of attackers.Following is a list of prominent threat actors that have targeted the financial sector:Malicious insiders: They are those with the authority to view, write, and transmit sensitive private and proprietary data held by a financial organization, particularly a bank. The average cost of a data breach, according to the IBM Cost of a Data Breach study for 2020, is $6.71 million, which includes both system failures and human error. Furthermore, the average cost of a cyber incident across all industries is $4.37 million. In 2008, a clerk at HSBC bank's London headquarters fraudulently wired ?90 million to Manchester and Morocco accounts. Hacktivists: A hacktivist is someone who engages in malicious behaviour in order to misappropriate a computer system or network for political or religious purposes. Hacktivism is the term for this type of action. Hacktivists, often known as hackers, organize groups of people and work together to conduct a political cyber-attack against financial institutions. In 2016, a group of unidentified hackers launched DDoS assaults against the Bank of Greece's website, as well as the central banks of Kenya, Mexico, Panama, and Bosnia and Herzegovina.Cybercriminals: Cybercriminals are individuals or groups who use technology to engage in destructive activities on digital networks or systems in order to steal sensitive data for financial benefit. They frequently trade illegitimate items and services on the dark web, such as illegal firearms, drugs, restricted pharmaceuticals, and adult content. In 2019, cybercriminals stole $100 million from over 40,000 victims, including banks, law firms, multinational enterprises, small businesses, and nonprofit groups, using the GozNym malware.Nation-states: A nation-state actor or state-sponsored actor is well-funded and sophisticated. Government entities sponsor them. The NoPetya ransomware outbreak in 2017 was a recent example of nation-state attacks. NoPetya is thought to be the speediest virus in history.Cyber terrorists: Those who engage in cyber-terrorism carry out malicious activities in order to disrupt the critical infrastructure of a target. Cyber terrorism is considered to be the new cyberwar. NoPetya and WannaCry ransomware are classified as cyber-terrorist acts.Script kiddies: Beginners or unskilled people who are lured into cybercrime activities are script kiddies.<h3 id="threat-modelling">Threat Modelling</h3>Cyber threat modelling is a technique for identifying, categorizing, and evaluating cyber risks in FinTech firms. The major purpose is to identify potential risks that could take advantage of the FinTech institution's flaws and cause enormous losses. As a proactive or reactive strategy, it aims to limit vulnerabilities and their influence on FinTech institutions.A defensive method, often known as a proactive threat modelling technique, tries to defend FinTech institutions from cyber-attacks. Early warnings and resource protection can be sent in order to predict cyber dangers. It is, however, impossible to anticipate all cyber risks in real-time.A reactive threat modelling technique, often known as the adversarial approach, involves taking necessary actions to avert a cyber threat. This includes tactics such as ethical hacking and penetration testing. To simulate threats, FinTech institutions concentrate on attackers, assets, or software. The right structural strategy will be determined by the size, nature, and amount of investment in FinTech.

The Cybersecurity Threat Landscape in FinTech: An Understanding

Many things have been transformed with modern technologies and have been digitized. Digitalization played a crucial role in modernizing the world. Digital technology has made everything very efficient and easy. In the present world, even payment can be made through digital platforms. It has reduced the need for fiat currency. Even though everyone has not completely adopted it, it has still seen a good response worldwide. This pandemic has nearly affected all the industries, and we all know that, right! But what became more important was to arrange all the necessary medical kits, such as the PPE kit and all the required amount of ventilators. Alongside these problems, another one is the pressure created by all the patients in the healthcare facility. Several surveys conducted by these healthcare facilities say that more than 80% of the patients prefer paying through a digital platform, as it is a secure mode of payment. Even after a huge market demand for digital payment, many healthcare facilities have still not modernized their payment methods. Such facilities amount to around 85%, which are yet to update their payment modes. Healthcare facilities with thousands of payment transfers every day need to adopt these payment modes soon. These healthcare facilities still transfer the payment bill through email and anticipate their patient providing cheques or, even worse, sharing their card details over telephonic communications. We all know, this process can jeopardize your transaction details. Many patients prefer those healthcare facilities that accept digital payment, which is a good move by them, as you wouldn't want your credit details to be used by some stranger in the wrong way. According to a survey conducted, more than 65% of patients will change the healthcare service if the healthcare facility doesn't offer digital means of the payment transfer system. These patients don't want to go through rough experiences because of the problems with transferring payment. It all comes down to convenience; digital technology is way more convenient than the old conventional paperwork. Who would've thought that the payment means in the healthcare facility would be a crucial factor that patients consider before consulting them for the treatment? All healthcare companies should adopt this new technology as soon as possible. Eventually, they will have no other option than to go with it, so why delay. Moreover, it does offer several benefits over the regular paperwork payments.<h3 id="fintech-for-healthcare-facility">Fintech for Healthcare Facility</h3>The never-ending pandemic that we are going through has triggered many changes across various industries throughout the world. Now, the way of doing business has changed entirely, and everyone is now used to this new pattern. However, among all these industries that went through several changes, one specific industry was the most focused one that has not changed its way of providing facilities and other services, i.e., the healthcare facilities across the globe. During this pandemic, keeping a safe distance and avoiding physical contact with others has played an important role. The healthcare facilities worldwide used to give out physical paperwork regarding the bills or any other information that involved physical connections. And now, the modern ideas which involve digital health information and the means of providing contactless and a very safe environment during this pandemic. As we know, we are still fighting this pandemic and are not yet past it. Moreover, this has forced everyone to have a remote meeting with the healthcare facilities. However, there is a significant change on its way in the way we pay our bills in healthcare facilities. Fintech propels this change for health tech. They have been working on making the process of payment easier for the patients in the healthcare facilities. The annual expenditure that the Indian healthcare facilities received was around $115 billion in the current year. Out of this total, approximately $72 billion was spent by the individual's savings or through some borrowings; note that this payment didn't involve the money paid through the insurance. Due to which people around the globe are incurring a lot of expenditure in healthcare facilities and are indebted to someone. These are inferred as Catastrophic Health Spending. The money that the people in India disburse on the healthcare facility is approximate twice the Cellphone industry in India itself. Imagine how simple it is to acquire a smartphone in India while comparing it to the healthcare facility's expenditure. It is enormous, isn't it? Everyone knows that whenever a person makes a payment. The person who is initiating the payment has the power in that particular transaction. However, this isn't the case in the healthcare industry. This healthcare facility is considered to be the place of upheaval in such cases. In case you eliminate the friction in such facilities, you have returned the power to the payer. In the healthcare case, the payer is the patient of the healthcare facility or the relative. These payments at healthcare facilities can be classified into two further factors: the payment system or the network, which is the base of the technology that enables the consumer to have a seamless experience while processing their payment. Today, it has become effortless; you just have to use your debit card or credit card, and within seconds the payment has been processed through the powerful network that lies under the system that helps run the process smoothly. Another factor is the accessibility of low-cost capital to subsidize the payment process. There are more than 748 million android phone users, along with more than 5 million POS terminals in the Indian region, the initial factor being looked after. Presently, the assortment of the physical as well as a digital payment network, the system that runs the process, is well built and has been substantiated. However, the main problem lies around the second factor: the accessibility of low-cost capital to disburse for all healthcare bills of any sort. And to make this happen, the 'embedded finance' will disrupt the money transfer equation in this industry. You just have to embed when you incorporate loaning and the payment option and many others in the digital payment wallet. This will make the transaction more smooth and efficient as much as feasible for the patients. Several others achieve the same purpose, such as the Israel origin PayZen to name one. It utilizes the information to generate an individual patient transaction alternative that incorporates a healthcare facilities revenue cycle network, making it more efficient and smooth for all the patients through their treatment. Moreover, this technology has been introduced in many healthcare facilities in India. It has become a hot factor now as it is finding its root in the country. Some healthcare facilities are coming in front to ease and further simplify the payment process throughout the journey. In India, the record of people dropping under the poverty line as a result of healthcare expenses is approximately more than five crores, and all this before we came across the unfortunate pandemic. And now, it has become serious. This has the potential to positively affect more than millions of people in India, for those who do not have facilities such as insurance.<h3 id="conclusion">Conclusion </h3>Other than the healthcare industry, retail and many enterprises recognized a chance in the fintech technology that eases the process of the transactions and enhances consumer experience throughout the process. It is about time that the healthcare facilities also adapt the same and make it simpler. In this particular case, the Indians can be on the front with the enormous amount of smartphone penetration as well as a huge number of healthcare facilities. As per the reports, processing the payment will become extremely smooth without any resistance within a time span of five years. This is indeed a great report, digital payment has now become a trend in every part of India, and it should be, as it is such a safe mode of transfer, where you need not worry about anything and it will even save you a lot of time.

Rahul Kumar

How Is The Payment Model Changing In Healthcare: Fintech For Healthcare Industry?

More investors are placing their bets on the financial technology industry since the pandemic accelerated the shift to digital services. <a href="https://www.computerweekly.com/news/252505146/Global-fintech-investments-reach-new-heights">KMPG's 'Pulse of Fintech Report</a>' reveals that global investment in financial technology reached an all-time record high of $98 billion in the first quarter of 2021. Investors believe that the digital transformations within the financial services industry are here to stay, and thanks to their capital investments, fintech companies are positioned to create better innovations faster.All of this comes at the benefit of consumers, who can now enjoy streamlined financial services through their smartphones. Fintech improves the way consumers interact with money ? from mobile payments that provide convenient cashless transactions to artificial intelligence solutions that decrease the risk of fraud.Below we've listed few ways through which technology is improving consumer finance.<h3 id="%C2%B7-automated-customer-support">? Automated Customer Support</h3>Even before the pandemic impacted people visiting physical banks, chatbots in banking were starting to gather steam. For financial institutions, having a single, dedicated chatbot solution that answers many customers' queries can significantly lower costs and increase efficiency. In addition, customers can enjoy real-time answers to their concerns, providing quicker and more positive customer service experiences.One example is <a href="https://thefinancialbrand.com/71251/chatbots-banking-trends-ai-cx/">Capital One's chatbot solution Eno</a>, a text-based banking assistant that can be contacted via bank's website, mobile app, and text messages. Eno was trained to understand how customers might ask financial questions and respond with natural speech, imitating a human. Eno can send customers alerts about transactions, frauds and notify them about any relevant subscriptions on top of responding to customer queries.<h3 id="%C2%B7-digital-only-banks">? Digital-Only Banks</h3>Though the lack of a physical branch might be problematic for some users, tech-savvy customers could find convenience in online banks.Online-only banks can cut down on the cost of managing physical branches, enabling them to offer their customers high interest rates on their deposits and lower fees. For example, the online bank Marcus by Goldman and Sachs offers savings accounts an annual percentage yield of 0.5%, four times higher than the national average. Certificates of deposit even offer APYs of 0.55% and above for fixed terms that exceed 12 months. Though digital-only banks lack a personal touch, consumers do have access to much better offers.<h3 id="%C2%B7-mobile-payments">? Mobile Payments</h3>When physical cash exchanges diminished during the pandemic, the demand for contactless payment methods grew. Mobile payment apps such as Venmo, Google Pay, Apple Pay, and Paypal enjoyed a surge in popularity last year. These apps eliminate the need for physical cash by allowing users to make transactions through their mobile devices.These digital payment methods now account for $1 trillion worth of the world's revenue. <a href="https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/">Juniper Research predicts that this number will increase</a> to $1.5 trillion within the next four years. Apple Pay currently represents about 5% of card transactions worldwide and is expected to cover 10% of all global card transactions by 2025.<h3 id="%C2%B7-alternate-payment-methods">? Alternate Payment Methods</h3>Some mobile payment apps have even begun accepting alternate methods of payment. Popular digital payment platform PayPal began rolling out cryptocurrency payment services to US customers in October 2020 and has recently extended its cryptocurrency services to users in the UK. With the cryptocurrency feature, customers can buy or sell virtual assets such as Bitcoin, Ethereum, and Litecoin. PayPal also gives users educational resources and tools for tracking real-time cryptocurrency price changes.Given the relative newness of cryptocurrencies, the general public's unfamiliarity creates a huge barrier to widespread adoption. Having easy-to-understand educational features on a platform as established as PayPal makes it easier for beginners to enter the cryptocurrency market.<h3 id="%C2%B7-credit-accessibility">? Credit Accessibility</h3>Technology is also making credit more accessible to individuals with complicated credit histories, such as young consumers or those who are considered 'credit invisible'. Petal 1 ? one of <a href="https://www.petalcard.com/blog/one-mission-two-cards-introducing-petal-1">Petal's credit cards</a> uses a more accurate cash scoring solution to effectively analyze banking and credit history to assess a client's creditworthiness.Additionally, the card comes with a mobile app designed to help clients improve their credit scores. Its features include a credit score tracker, budgeting tools, subscription management, and auto payment options. This way, customers can manage their spending while staying on top of their monthly payments, thus putting themselves on the path to financial freedom.<h3 id="%C2%B7-consumer-lending">? Consumer Lending</h3>Even loans are now more accessible through fintech solutions. Online lending resource Biz2Credit uses AI to evaluate the creditworthiness of small businesses. Their financial score simulator tool, BizAnalyzer, studies revenue, cash flow, and credit scores to generate a clear image of a company's financial health. It then uses these metrics to generate a score from 1 to 100, which can be used to determine the company's likelihood of getting business loans approved compared to industry competitors.<h3 id="%C2%B7-wealth-management">? Wealth Management</h3>Developers are also looking for ways to digitize wealth management. According to <a href="https://techfastly.com/the-future-of-wealth-management/">Barka Sheth's piece on Wealthtech</a>, modern advisory firms are using AI and machine learning to analyze client data and generate actionable investment recommendations. Rather than employing analysts, who may lag behind when it comes to market analysis, clients can seek real-time market advice from quick-thinking Robo Analysts.For example, <a href="https://ibsintelligence.com/ibsi-news/scalable-capital-secures-e150-million-in-series-e-round-led-by-tencent/">digital wealth manager Scalable Capital</a> lets customers buy cryptocurrencies, ETFs, and stocks through a Robo Advisor. Removing the "middleman" allows clients to make transactions faster while cutting down the cost of brokerage fees.<h3 id="%C2%B7-fraud-prevention">? Fraud Prevention</h3>With cyberattacks increasing as financial institutions rapidly shift toward digital services, many companies prioritize cybersecurity.In 2018, Citi Treasury and Trade Solutions partnered with <a href="https://www.finextra.com/pressarticle/76809/citi-searches-for-fraud-in-real-time-transactions-with-feedzai-machine-learning-tech">fintech startup Feedzai</a> to improve real-time risk management in their banking services. Feedzai's solutions use machine learning technology to monitor changes in client behaviour. Feedzai can detect anomalies in client transactions and alert the company before payments are processed by analyzing client patterns. These processes rely mostly on technology, so they do not slow down customer transactions allowing clients to make payments quickly, efficiently, and securely.<h3 id="ending-note">Ending Note</h3>While the shift toward digital solutions was accelerated by the temporary "new normal," the innovations created to improve financial services are here to stay. Thankfully, these industry changes have created a consumer-first landscape that makes financial services safer, faster, and easier to use.

Techfastly Team

How Technology is Shaping Consumer Finance

<h3 id="understanding-fintech">Understanding Fintech</h3>Fintech refers to technology aimed at automating the delivery of usage of financial services, therefore increasing the accessibility to a larger number of people.Fintech which is referred to as technologically aided financial solutions seems to be a new concept but has been intertwined ever since the modern era has started. Fintech has become the new normal and it is expanding day by day.It's frequently referred to be a merger of financial services and information technology. Startups and existing financial institutions, as well as technology firms seeking to replace or improve the usage of financial services supplied by present financial institutions, are all part of the financial technology industry.<h3 id="history-of-fintech">History of Fintech</h3>Since banks went online, financial technology has been developing in front of our eyes. As we move toward a cashless world, new applications and platforms have emerged to help us better understand and manage our accounts, as well as new banks that provide a more streamlined experience. Understanding where fintech came from might help us predict where it might go in the future. We will be better prepared to predict which goods and services will thrive in the next years if we grasp the dynamics that have been driving this transition.We are going to discuss how Fintech has evolved and how Fintech will be in the emerging market.<h3 id="fintech-10-1886-1967">Fintech 1.0 (1886-1967)</h3>This is the period when we can start talking about financial globalization for the first time. It all began with technology like the telegraph, railways, and steamships, which permitted for the first time the fast transfer of financial data across borders. The first <a href="https://www.e-zigurat.com/innovation-school/blog/evolution-of-fintech/">non-stop cable</a> (1866) and Fedwire within us (1918), the primary electronic fund transfer system, which trusted now-archaic technology like the telegraph and Morse code, are among the major events in this timeline. Credit cards were introduced in the 1950s to alleviate the hassle of carrying cash. Diner's Club was the first to offer one in 1950, followed by American Express Company with their credit card.<h3 id="fintech-20-1967-2008">Fintech 2.0 (1967-2008)</h3>Traditional financial institutions are leading the transition from analog to digital during this time. The introduction of the first portable calculator and the first ATM by Barclays bank in 1967 heralded the start of the contemporary era of fintech. In the early 1970s, several major changes emerged, including the formation of<a href="https://en.wikipedia.org/wiki/Nasdaq"> NASDAQ,</a> the world's first digitized stock exchange, which marked the beginning of how financial markets function today. SWIFT (Society For Worldwide Interbank Financial Telecommunications) was founded in 1973 and remains the first and most widely used communication protocol between financial institutions for enabling huge volumes of cross-border payments to this day.The advent of bank mainframe computers in the 1980s exposed the globe to online banking, which boomed in the 1990s because of the Internet and e-commerce business models. People's perceptions of money and their relationships with financial organizations have shifted dramatically as a result of online banking. Banks' internal operations, interactions with outsiders, and retail consumers had all been fully computerized by the turn of the century. The Global <a href="https://www.emergingpayments.org/article/fintech-the-history-and-future-of-financial-technology/">Financial Crisis</a> of 2008 marked the end of this period.<h3 id="fintech-30-2008-current">Fintech 3.0 (2008-Current)</h3>The general public acquired a suspicion of the conventional banking system as the cause of the Global Financial Catastrophe, which quickly transformed into a broader economic crisis, became more publicly known. This, along with the fact that many financial experts were out of jobs, prompted a shift in mentality and prepared the way for<a href="https://www.e-zigurat.com/innovation-school/blog/evolution-of-fintech/"> Fintech 3.0</a>, a new sector. Another significant event in the financial world was the introduction of Bitcoin v0.1 in 2009, which was quickly followed by the rise of several cryptocurrencies (which, in turn, was followed by the crypto crash in 2018).Another major element that has altered the face of fintech is the widespread use of smartphones, which has given millions of individuals across the world access to the internet. Smartphones are also the most common way for consumers to access the internet and use various financial services. <a href="https://searchcio.techtarget.com/definition/Google-Wallet">Google Wallet</a> was launched in 2011, followed by Apple Pay in 2014.<h3 id="fintech-in-emerging-market">Fintech in Emerging Market</h3>The way mobile phones have transformed consumer behavior and how people access the internet is also why the Fintech industry has got a boom in recent times. China (69 percent) and India (49 percent) are the nations with the <a href="https://www.e-zigurat.com/innovation-school/blog/evolution-of-fintech/">largest Fintech usage</a> nowadays (52 percent ). China, India, and other emerging countries never had the chance to determine Western-style physical banking infrastructure, making them more receptive to new ideas. In the case of China, fintech adoption is far higher than the world average (33 percent) as well as the average adoption among developing economies (46 percent ).<h3 id="conclusion">Conclusion</h3>We tend to think of banks and fintech firms as antagonistic forces battling for market share as technology becomes increasingly essential in the banking industry. The truth is that both sides require each other just as much as they require competition. Fintech firms, on the one hand, have received bank investment and frequently rely on banking, insurance, and back-office partners to offer their main goods. Banks, on the other hand, have bought or invested in fintech firms to improve their existing operations and products by using new technologies and methods of thinking. Hopefully, this looks back at the development of fintech will help to summarise how far we've gone and put the busy times ahead of us into perspective.

Ragini Agarwal

How Has Fintech Evolved?

Ethereum 2.0 is an ambitious project that is long overdue. Unfortunately, the release was pushed back due to the novel coronavirus, and it is now expected to release by the end of the year. It aims to take Ethereum to the next level by making crucial changes that will improve scalability and replace the existing Proof of Work mechanism with a Proof of Stake mechanism. Bitcoin is the king of the crypto world. There's no denying this fact; even though it has a significant amount of flaws, it still tops the market capitalization charts. A lot of other blockchain implementations have solved some of Bitcoin's flaws, but they still cannot even come close to Bitcoin. Ethereum is the exception here. It stands right below Bitcoin, and with the release of Ethereum 2.0, it might as well dethrone Bitcoin.<h3 id="what-exactly-is-ethereum-2-0">What Exactly is Ethereum 2.0?</h3>Ethereum 2.0 (also known as Serenity) brings two primary improvements to the table: Proof of Stake and Shard Chains.Proof of Stake The move from Proof of Work (PoW) to Proof of Stake (PoS) is a welcoming change as it proves stronger in terms of security, scalability, and energy efficiency. Unlike PoW, which uses computing power to validate transactions, PoS relies on staking. The user becomes the validator who has to deposit an amount of ether. The user with the highest stake of ether will be chosen to validate the transactions and will earn rewards as transaction fees. Nowadays, normal people find it almost impossible to mine on these blockchains given the existence of mining farms. These farms hold the highest computing power, and this model reduces the fairness in the system. This could lead to security issues given that the power is only with a few of these mining farms. The shift to PoS will prove to be extremely safer than PoW. Energy consumption has been an issue lately, and guess what? Bitcoin mining utilizes almost half the world's electricity consumption. This is alarming, and PoS addresses this problem very well. It completely eliminates the need for computing power and instead depends on the amount of ether a user stakes?cheers to a greener alternative.Shard Chains Shards chains are introduced to improve scalability and allow more transactions per second. These are multi-lane highways rather than a single-lane roads. It promotes parallel processing to achieve higher throughput. The currently existing single-chain blockchain is secure but is too slow since it requires the full node to validate transactions in consecutive blocks. Sharding splits the Ethereum blockchain into multiple chains to provide faster transaction speeds and hence improve scalability. To become a validator in the chain, one must stake at least 32 ETH. This can be done in two ways:<ol>
<li>Run a private validator node and stake ETH yourself</li>
<li>Stake ETH using a stake provider (Yet to be launched - Trustology has announced to create the service)</li>
</ol>
The validators can lose these funds if they are offline and do not fulfill their responsibilities. The penalty might be as much as the rewards received. A validator is required to be participating for at least half the time. The staked funds are in danger only if the user is subject to slashing. Slashing is the act of giving severe penalty and ejection from the chain. It will happen if the user publishes contradictory information about the chain. The funds lost might range from 1 ETH to the entire stake amount.<h3 id="when-is-it-releasing">When Is It Releasing?</h3>Ethereum 2.0 was supposed to debut in January 2020, but the release kept getting pushed back due to unavoidable reasons. Vitalik Buterin (creator of Ethereum) has now promised that Ethereum 2.0 will be launched by the end of 2021. The seed has been sowed with the release of the final public testnet, Medalla. The release is planned in three phases: Phase 0 (Beacon Chain), Phase 1, and Phase 2.Phase 0 (Beacon Chain) To allow a seamless transition from the Proof of Work to the Proof of Stake mechanism, a Beacon chain with a PoS mechanism will run in parallel with the existing chain. In the initial stage of Phase 0, mining will continue.Phase 1 (Sharding) This is expected to launch somewhere in 2021. It aims to split the Ethernum chain into 64 chains that will run alongside the beacon chain. There is a phase 1.5 as well where the mainnet will become a shard and will ultimately adopt the Proof of Stake mechanism.Phase 2 (Fully functional Shards) Phase 2 strengthens the sharding process, and shards will now be capable of interacting with smart contracts. Withdrawals and transfers are made accessible. Applications can be built on top of them, and cross-shard transfers will be possible. eWASM will officially become the successor of EVM. Phase 2 might potentially release after 2021.<h3 id="will-it-affect-ethereum-1-0">Will It Affect Ethereum 1.0?</h3>Ethereum 2.0 will be released in phases to make a seamless transition from the first version. People who own ETH needn't worry as the assets will be migrated to the new chain as the phases progress. A brand new coin is not going to be created, but it is expected that with the release of Ethereum 2.0, the value of Ethereum will reach new heights. The release of the public testnet Medalla has proven to be a step in the right direction. Ethereum Foundation's Hudson Jameson confirmed that the expected number of peers had joined the testnet to consider it workable. This is the first official public testnet, and the developers did not unanimously choose the validators. Almost 650,000 ETH is staked, courtesy of over 20,000 validators (this is not real ETH and is only used for testing purposes). Medalla was joined by five clients, including ChainSafe's Lodestar, PegaSys' Teku, Status' Nimbus, Prysmatic Labs' Prysm, and Sigma Prime's Lighthouse.<h3 id="why-is-it-so-hyped-up">Why Is It So Hyped Up?</h3>Ethereum 2.0 has been in the making for over five years. Scalability is one of the biggest issues in the blockchain and is tackled cleverly in Ethereum 2.0. Ethereum is massive, and it is evident from the amount of crypto assets locked in Defi. DApps built upon Ethereum are looking forward to the launch as it will help them scale their apps. The transaction fees are also expected to go down, which might lure more people into the crypto market. It is quite interesting to see how the supply of ETH will change as there is no cap on it, but it is to be noted that ETH supply will be lower in the new blockchain when compared to the existing chain. The upgrade is not going to happen in the blink of an eye. It will take a lot more time for Ethereum 2.0 to be perfectly polished, given its complexities.

Why Ethereum 2.0 Deserves The Hype

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