FINTECH & REGTECH FAQ

Fintech, which synergises finance and technology, can be used to enhance operations and flow of financial services in the form of software, service, and/or businesses.

This allows companies to push the edge of technology to increase efficiency and disrupt traditional methods of finance.

To move beyond traditional financial services, fintech companies tend to require more advanced technology to power their services, thus we often see such technologies being deployed by companies.

• Artificial Intelligence (AI)
• Machine Learning (ML)
• Big Data
• Blockchain
• IoT

With Fintech, the entire investment scene has increased and improved with features like crowdfunding, which rely on fintech platforms to offer companies to raise funds around the world without any boundaries.

Mobile payments and gateways are the commonly seen uses of fintech, this helps the unbanked and allow a far wider feature for customers to send and receive money with low fee

.

Regulatory and Insurance technology are also possible due to the advancement of fintech.

Lending - There is no longer a need to rely on banks or credit unions to borrow money, as an increasing number of FinTech companies can loan directly to people, via online and it can be approved quite fast. Credit worthiness can be assessed quickly and automatically.

Payments - Cross-border payments, along with sending of money without incurring exorbitant fees via peer-to-peer transfer is a part of Fintech’s evolution, it can further be improved with the use of blockchain technology.

Consumer Banking - Banking can be done digitally, with the advent of Fintech companies having the license and technology to operate an online bank, furthermore, unbanked people who are unable to get credit cards can now get prepaid cards from Fintech companies instead.

A portmanteau of the words “Regulatory Technology”, RegTech is created to address regulatory challenges in financial services through innovative technology. 

Save companies time, money and help protect them against regulatory fines because of non - compliance by the reduction in information collating to generate reports.

Money is saved in employee time to complete tasks and by using one solution throughout the company, while automatic alerting those responsible for ensuring compliance can be alerted to non - compliance automatically

Verification - Identity verification via documents, KYC and AML checks

Onboarding - KYC compliance, the automation of it, reducing cost and faster onboarding processes in real time

KYC Sharing - Keeping KYC data up to date and drive down costs

Risk Analytics - Up-to-date monitoring, security of data and investigations

Reporting - Ensuring that regulation is kept and updated along with automation for reporting

Blockchain, a word commonly seen in cryptocurrency news, is actually the technology driving the rise and usage of cryptocurrency, and is actually more than just a token.

Blocks store data, which in turn is linked cryptographically in a series of chains, and is an open ledger where people can record transactions in a transparent way and impervious to outside modification other than the ones decided during the transaction.

Smart contracts are used to execute transactions in a blockchain, this is written in code and is acknowledged by both transacting parties prior to its deployment. 

Blockchain can be used in multiple methods including but not limited to the below examples

• Payment processing
• Digital ID
• Loyalty points
• Data Sharing
• AI
• Voting or Poll
• Data backup
• eCommerce
• Digital Currency

And more!

Digital wallets, or e-wallets, are software on your phone or computer that helps to store and process user information and provides various payment methods.

Using digital wallets, one can do online shopping or even top up their prepaid cards and generally any services which one will use for payment.

Digital Wallet allows the user to save space and time by replacing traditional payment methods and wallet all on the user’s mobile device. This also helps to monitor data to analyse spending habits.

One can also make payment transactions or remittance without the need of going through a traditional bank, thus, opening us financial services to the unbanked

Digital wallets can be used at various merchants both online and offline depending on the shops, many apps and websites on our phone, computer and tablets can be used as well for your purchases.

Digital wallets can be used at various merchants both online and offline depending on the shops, many apps and websites on our phone, computer and tablets can be used as well for your purchases.

One can use their digital wallet to make online and offline purchases such as bills, fares, payment, as well as transfer money between payment devices like debit card machines.

Funds can be transferred to your prepaid debit card from your digital wallet app or software as and when you need. It is very useful for people who wants to make payment from different account all on 1 app.

Digital wallets tend to require various security measures such as password, biometric etc, thus even if someone uses your phone, they will be unable to access your money and data.

Paying with one's digital wallet is actually safer than traditional credit or debit cards or cash. Firstly your credit card will not be disclosed to the retailers, thus removing that threat. Secondly your account information will be encrypted along with a  randomized transaction number being issue, therefore, the chances of theft and fraud will be lowered comparatively.

KYC, refers to Know-Your-Customer. It is a process in which businesses are required to perform to verify the identity of their clients and assess potential risk of illegal intention. Main objective is to prevent criminal elements like money laundering. 

AML, also known as Anti Money Laundering act, is a set of policies, procedures that financial institutions are required to comply for the purpose of preventing money laundering and corruption 

CFT stands for Combating the Financing of Terrorism (CFT), it involves throught investigating, analyzing and preventing sources of funding for groups or organisation intending to achieve religious or ideological thinking through violence. 

Proof of Identity normally refers to a document that users can use to prove their identity. Usually an Identity Card, Passport or Driving license. 

Customer Identification Program is the first step of any KYC procedure which requires the bank to collect a potential customer's documents such as Identity cards, proof of address and date of birth and more.

Customer Due Diligence is the action that financial services need to perform to assess the potential risks of the customers and ensure that the identity is not considered to be high risk, if it is to be considered as high risk, an additional Enhanced Due Diligence (EDD) will be required

Enhanced Due Diligence is mandatory should the individual pose as a high risk target for activities such as money laundering or terrorist financing. These individuals will need to be monitored closely and heavily regulated to ensure that malicious activities does not happen.

General Data Protection Regulation (GDPR) is data protection law regulated in the EU regarding exportation of personal data outside EU and EEA areas. This is to ensure that individuals retain control over their personal data.