3 Incredible Ways Fintech Startups Can Maintain Cyber Security

computer-securityThe following article is a continuation of “3 Ways Fintech Startups Can Maintain Cyber Security” Please look to that article for additional pertinent information. 

Cyber attacks are so common in this day and age that preventing them is a key part of being a Fintech professional. Follow these tips and you’ll be able to make sure your company’s data is as secure as possible.

1) Encrypt your data

There’s no way of knowing for sure that your product is secure. That’s why it’s important to encrypt your data. While many say that encryption will make your app slower, but there are ways to get around it. Just look at some of the giants in the tech industry. Facebook runs encryption on separate services so as not to compare the speed and the ease-of-access. It is not enough to have an SSL or a HTTPS.

2) Know which bugs to look out for

Even when you use the best code review tools, you are not guaranteed to find all of the bugs in your code. One way to make things easier is to identify which bugs could cause the most damage. While you should definitely invest in code review, it also helps to identify and address the particular bugs that could be harmful to your company.

3) Run a penetration test after each major change

One of the most important safety assurance activities is penetration testing, a process that is unfortunately often misused. It should not be a replacement for any of the other steps. A “clean” penetration test report doesn’t necessarily indicate that your system or application is perfectly secure, but it does help you check that your code will not fall apart if it is subject to attack.


3 Ways Fintech Startups Can Maintain Cyber Security

cyber-1654709_1920Fintech companies have been warned for a while now about cyber attacks. In 2016, it’s not a matter of “if” a Fintech company will be hacked, but “when.” Within this year alone, more than 3 million credit card records have been made public.

Supposedly impenetrable shields that are used around online banking systems are currently being questioned by experts and critics. If you’re building a Fintech product, keeping it secure may be more difficult than expected. Here are a few tips to prevent cyber attacks:

1)Have a Chief for Information Security

Creating a culture of security within your company requires a leader. Get a Chief for Information Security who has a clear vision and is able to tackle the job. This person will need to bring up the topic of security in meetings, and must also be okay interacting with hackers.

2)Use architecture and code review

The first step to securing an application is an architecture review. Make sure you define your security requirement along with the product features before you begin writing lines of code. Right after every code release, review your code security loopholes. Make sure the members of your team understand their bad practices and mistakes. While reviewing every line of code is tedious, it is also the best way to find security loopholes.

3) Provide role-specific security training

If you want to ensure security, you must give your staff more than the typical generic security awareness courses. You need to provide the knowledge and skillsets required for their specific roles. Security can not be taught through a one-size-fits-all approach.

For more information on fintech startups and maintaining cyber security, please read the follow up piece to this article, “3 Additional Ways Fintech Startups Can Maintain Cyber Security.”


What’s Next for the Fintech Sector in 2017?

David E. MickeyFinancial technology has historically moved slowly, but a number of new trends are breathing life into what many view as an uninteresting segment of the tech sector. Here are a few exciting fintech developments to watch out for in 2017.

A Credit Card for the 21st Century

Many data breaches have highlighted the fragility of our credit card system. While the slow expansion of chip-and-pin readers address some of its issues, there are many areas in which fintech can change the face of credit card transactions and processing.

One example of such innovation is Final, a credit card built for the 21st century. Final cards support creation of one-time or limited-use numbers, limits on charges, and other features that minimize the frustrations caused by data breaches or nefarious merchants. As credit cards become easier to obtain and use, financial technology must address the risks posed by a single set of credentials that give merchants access to a consumer’s finances. We are sure to see more companies like Final attempt to address this pain in 2017 and beyond.

Faster Processes

While technological innovation advances at an ever-increasing pace, much of fintech thrives on standards not updated in decades. This is understandable from the perspective of regulation and bureaucracy, but the sluggishness of financial processing propagates across many layers of business, causing delays that become increasingly difficult to justify.

Thankfully, large financial institutions are beginning to develop interfaces and services that speed up common interactions. American Express recently opened up some aspects of its platform to developers While these changes may seem small when taken individually, they will ultimately pave the way for a more open and programmatic way to move money between individuals and businesses.

Blockchains in the Back Office

Pioneered by the popular Bitcoin digital currency, blockchains are methods by which groups of users who do not trust each other can agree on an outcome. Blockchains can clear transactions, track ownership of assets, and record agreements in a way that does not depend on a single entity or server.

Though Bitcoin itself has many challenges that make adoption risky, the underlying blockchain technology has broader uses. Microsoft laid the foundations for its adoption with Blockchain as a Service, a platform that simplifies experimenting with and deploying blockchains for custom purposes. Instead of driving entire currencies, we’re beginning to see blockchain technology used to move and quantify assets between small groups of financial institutions. The full usefulness of blockchains has yet to be explored, but they are likely to play a crucial and growing role in the future of finance on both large and small scales.


The future of financial technology is defined by openness, speed, and greater consumer protection. As innovation becomes easier, we are likely to see more interest and excitement in an area of business that has to date been dull, uninteresting, and slow to evolve.

The Global Economy Is Suffering: Is The U.S. Responding Wisely?

The Global Economy is Suffering by David E. MickeyAfter Brexit, the already weak global growth is likely to be eroded even further. The world has a wage-depressing surplus of labor and excess capacity. Oil prices will likely plunge even lower than their already low prices. Corporate profits are unstable and deflation is posing an issue for central banks. Given these conditions, it would be logical to expect financial markets to have increased demand for safe-haven U.S. Treasuries. You’d probably also expect to see falling commodity prices, a soaring dollar, emerging market debt, and increasing aversion to junk bonds on the part of investors. This, however, is not the case.

This year, commodity prices such as oil have risen. For months, the 10-year Treasury yield has been flat. Emerging market bonds and junk bonds are attracting increasing amounts of money. It is likely that these conditions may lead to major market correction so that prices will be in line with economic fundamentals once again. When we look at the slow economic growth and negative interest rates that occur in countries with super-aggressive monetary policies, we see that perhaps things are out of alignment and the resolution will be a shocking process for many market participants.

The valuations may not be justified, but there are a few possible explanations for current market conditions that could also serve to lessen the blow of an abrupt reversal. Despite historically high price-to-earning ratios, U.S. stocks still may be cheap. Equities continue to be attractive when the dividend yield on the S&P 500 index is compared to those available on 10-year government debt. When we make this comparison, it seems stocks may be undervalued by more than 60 percent.

There is also a possibility that a fiscal stimulus program will emerge in order to revive growth. Even central bankers are admitting that meaningful economic growth has not been generated by monetary policy, and politicians will be increasingly pressured to their part in both the U.S. and in the euro zone.

Once we have a new U.S. president, both political parties may be able to reach a middle ground through infrastructure spending. The U.S.’s infrastructure certainly needs an upgrade, from the bridges and roads to the public transportation. According the the World Economic Forum’s most recent Global Competitiveness Ranking, the U.S. is third overall in competitiveness, but it ranks 13th for infrastructure quality as a whole. It is estimated that each driver is paying an extra $377 annually due to aging roads and bridges.

The National Association of Manufacturers believes that for the next three years, $100 billion should be spent on major infrastructure each year. The association also points out that between 1956 and 2003, outlays grew 2.2 percent, but from 2003 to 2012, it fell 1.2 percent annually, for a total of drop of 19 percent in the 2003 to 2012 time period.

If the post-election climate brings a better political climate and a decrease in the amount of spending, investors may still be too calm about the outlook. The S&P index is up about 6.2 this year, and the VIX index, a measure of expected volatility for the future stock market, is staying at historically low levels.

If things reverse, the U.S. might follow in Europe’s footsteps. The European region has erased almost all of 2015’s gains with a benchmark Stoxx 600 index that is down more than 5 percent. For investors in this economic climate, it is best to hold universally large cash positions until the future is a bit more clear.

The world is in a time of economic turmoil. The U.S. may not be spending in the best way possible given the conditions, but there is a lot that is unknown in the financial and political landscape of the U.S. Only time will tell where our country’s economy is headed.


Swedish Bank SEB Backing its First Bitcoin Business, Coinify

seb_416x416Swedish Bank SEB (Skandinaviska Enskilda Banken), headquartered in Stockholm, has long been interested in venture capitalism, evident by their active investment in “deep technology” for 20+ years. Now, SEB will be backing its first bitcoin business.

The investment branch of SEB, SEB Venture Capital, has involved itself with investment into a wide range of startups since 1995.

Post-trade securities startup Information Mosaic and management app Tink are among the many startups SEB has funded over the years. CA Technologies purchased SEB investment Arcot for $200 million in 2010, and four years later Cisco purchased SEB investment-funded Tail-f for $175 million.

SEB’s team of nine investors assigned $250m (2bn SEK) from SEB Group to Coinify,  with early-age Danish venture capital firm, SEED Capital Denmark, contributing support as well. SEB Venture Capital, which reportedly has a voting share of between 5 percent to 9.99 percent in the company, acknowledged the investment is “purely financial,” but insists that Coinify’s presence in its portfolio is about far more than an exit strategy.

“Coinify has developed a unique platform for blockchain payments and fits perfectly in our portfolio of FinTech investments,” David Sonnek, SEB’s head of venture capital, said of the new investment. “We, at SEB Venture Capital, really look forward to contributing to Coinify’s future development.” He added, “This kind of platform really unleashes the innovation of us all, and that may be the most important aspect.”

Coinify launched in 2014, benefitting from a multi-million dollar deal with SEED. Coinify supports payment in 15 digital currencies, and it plans to expand its payment and trade services throughout Europe and Asia. Coinify offers payment solutions for the digital payment (ex. Bitcoin and digital currencies). SEB’s Stefan Olofsson and SEED Capital’s Lars Andersen  joined Coinify’s board of directors, and SEB investment manager Filip Petersson is acting as the deputy director for Coinify.
While SEB will take on roles outside of their $4m investment, Sonneck has said that his team isn’t expected to become involved with Coinify’s day-to-day operations, but will focus on larger strategy. SEB intends to help grow the company and become a “more tech savvy bank.”

Did Bitfinex Security Breach Prompt Bitcoin Dip, Expose the Digital Currency’s Vulnerabilities?

11297241203_453f1342a6_bBitcoin, the digital currency, took a dip on Wednesday following the hacking of Bitfinex, which is a Hong Kong-based exchange. During the hacking, funds were stolen.

In reaction to the event, the exchange has been paused. Also, withdrawals and deposits are being investigated. Consequently, Bitcoin’s trading value plummeted about 20 percent during early hours in Hong Kong, according to the New York Times. However, by early afternoon, it had recovered about half of its loss. Director of Community and Product Development Zane Tackett didn’t respond to NYTimes request for a comment, but he did indicate via a Reddit post that 119,756 Bitcoins had been stolen.

Prior to the public announcement about the hacking, the loss was was equivalent to $72 million. That loss has lessened, bringing the figure closer to a still astounding $65 million. The Hong Kong exchange, which is one of the world’s largest, said the following in a blog post, ““As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach.” Additionally, Bitfinex  indicated that any customer’s losses would be investigated and acknowledged in the future.

The viability of Bitcoin has been questioned thanks to security breaches such as this one. Just two years ago, in 2014, Mt. Gox, an exchange based in Tokyo, was targeted. Hundreds of thousands of Bitcoins were stolen in a heist that still has law enforcement officials and experts baffled. More than $50 million worth of Ether, another form of digital currency was nabbed by a hacker during June of this year. The funds were taken from the Decentralized Autonomous Organization experimental virtual currency project.

While some exchanges may be shaken by these recent events, others are unruffled. Chief strategy officer at the large digital currency exchange OKCoin, Jack Liu, indicated he wasn’t concerned about his company’s security because he’s using a different system. He believes there should more conversations launched about best practices. If hackers are getting better and adapting that isn’t safe for the industry overall.

The Bitcoin community views the digital currency as the future of finance, ensuring faster and transactions, but there’s internalized competition and debates surrounding technology that could potentially permit vulnerability. Part of the coding that underlies the currency is known as the blockchain ledger, and it’s gaining traction as banks see the benefit of using technology to speed up trade. Nonetheless, they all exchange and trade to be secure.

Bitfinex has reported the crime.

5 Ways Banks Can Use FinTech to Build Trust, Support Customers

online-banking-advantagesBanks can use fintech to build trust, believe it not. When catering to a consumer base that expects nothing less than instant gratification, fintech companies, and partnerships can offer traditional banks tools that guarantee convenience and seamless customer service.

Wasteful and cumbersome, physical pieces of paper aren’t convenient and can challenge customer service for many in the banking institution. For that reason alone, many people refrain from using banks, expecting that it’ll be time-consuming –that’s on top of a preexisting distrust of the traditional banking system. However, banks are demonstrated that they’re interested in address distrust and negativity. They’re willing to take on public perception by using digital tools to move products that are customer-centric. They’re interested in doing a number of things in order to better satisfy the communities they service, and among those things are the following:

  1. Demonstrate that they’re customer-center: Since the birth of the banking industry, the focus has been on the products, but technology has offered an opportunity to focus on customers first and foremost. Through engagement via social media and other platforms, banks can inquire about customers’ specific needs, their desires, and concerns about wealth management. In order to do this, banks must be able to focus on internal data analytics, which fintech can assist with. Fintech has made data more comprehensive and palatable. It also eases customization, automation, and tailored bank offerings.
  2. Develop seamless banking systems: Among the numerous things fintech companies are able to do, they’re great at helping banks to implement solutions, which makes it easier for customers to access necessary services and they help with customer interaction with banks at every level. Ultimately this leads to greater satisfaction.
  3. Offer targeted service offerings: Data analytics are another specialty offered by fintech companies. They’re able to provide targeted insight, incentives, and opportunities to clients. Based on needs or desires of certain clients, companies can accurately suggest services or products after gauging after gauging requests made by clients in similar situations.
  4. Correct and address any concerns faced by the underbanked and unbanked: Fintech can be used to serve an important, overlooked segment: the underbanked and unbanked. Financial technology can equip banks with easy and inexpensive mechanisms to educate and equip customers, facilitating access to convenient options that make digital payment, mobile payment, and online banking possible for those in the U.S. and abroad.
  5. Broaden a prospective client base: Those banks with enough foresight to employ the expertise of fintech companies, they’ve gained access to a wider variety of customers. Fintech companies can provide low-cost insights on upscale and as well as those with lower net worth. Data analytics and robo-advisory advancements are making wealth management attainable. Incorporating fintech innovations into organizations will help banks to reach a greater collection of customers.

Fintech is easily improving the relationship between customers and banking institutions. Connectivity, convenience, and customer-specific interactions have emboldened the banking population.

Paymency, API-driven Platform for Banking, Delivers “Banking-As-A-Platform” Service to US

paymencylogo_transparentWhile numerous European startups have succeeded in transforming banks into app stores, only the California-based Paymency has managed to do the same in the U.S. According to the American Banker, the API-driven platform for finance and banking delivers “banking-as-a-platform” service to U.S. banks.

Paymency founder Gary Lewis Evans predicts that application program interfaces will power banking. With the use of APIs –known to ease the outsourced software app creation process when building for customers — users will benefit revolutionary impact that’s akin to the emergence of credit cards or internet banking.

“We are going to be an API-driven platform for finance and banking the way Amazon is a platform for retail,” said the fintech veteran, Lewis. “Banks will have the ability to interface easily with products and services and use it as a way to create a virtual bank and get out of the legacy branch structure.”

Banks will have access to Paymency’s edition of an an app store, where they’ll offer budgeting, mobile payments, personal financial budgeting, as well as services a tad more sophisticated (P-to-P lending, insurance, and investing). Numerous fintech companies and their partners will be able to offer up products in the store. What’s more, Paymency may seek out a bank charter, making it possible for nonbank entities (ex. Walmart) or digital bank startups to connect and offer their customer base full-scale banking services. Microsoft Azure cloud computing platform is used as the base technology for Paymency.

According to Lewis, the company soon plans to unveil its text-based mobile payments product and network Groovy Pay, which resembles Kenya’s M-Pesa mobile payments system.

“I describe it as something very similar to when Amazon first launched as a bookseller, and then they expanded their platform at a later date,” said Lewis, who co-founded Bofl Federal Bank, once known as Bank of Internet USA. “So we’re going to launch with mobile payments and build our base that way before expanding.”

With more than four decades of experience under his belt, Lewis has a long history of digital innovation. He spearheaded California’s early venture into internet banking in 1995 when he was serving as president of La Jolla Bank, which was one of the first in the nation to do so. Lewis left La Jolla Bank in 1996 to launch Bank of Internet USA, starting out in a computer center at the University of California-Santa Barbara. He stayed on as president until 2010, leaving to pursue his next project, Paymency.

A “soft launch” of Paymency with GroovyPay is expected within the next six months. Lewis believes it may take up to three years for Paymency’s app-store-like platform to be fully formed and formally launched. The API-based model provides more flexibility, with regards to services and products, making it far more attractive to banks. To do this the right way, Paymency will have to appeal to banks’ core vendors, and banks’ will require core systems that could facilitate API-based banking. Core vendors tend to wank banks to buy all or most of their ancillary products from them, rather than another party. However, many believe core vendors are becoming more flexible and more willing to under consumers’ attraction to API-powered banking.

Banks are also more drawn to the idea of partnering with outside firms, so they’re able to offer more services and products. These fintech partnerships are changing with the market, becoming more fluid and more dynamic, offering solutions and becoming provocative for the sake of expectant consumers. The API banking-as-a-platform services are natural progress, as that’s the way technology is moving. Technology is moving so rapidly, that this is API banking-as-a-platform services are fixed part of banking reality, according to Lewis.

Switzerland’s Visa Cardholders to Gain Early Access to Apple Pay

IPhone_5S_main_cameraVisa Inc., a global payments technology company, has announced that approximately 1 million Visa cardholders in the nation of Switzerland will gain early access to the Apple Pay, which offers users a secure, efficient, and private way to complete transactions.

Cornèrcard and Bonuscard.ch customers will be able to use Apple Pay at over 100,000 contactless point-of-sale terminals in Switzerland. In less than for yours time, it’s expected that all Visa payment terminals will accept contactless payments.

“With today’s launch of Apple Pay, a global mobile payment solution based on credit cards and NFC (contactless) entered the Swiss market,” said Stefan Holbein, Country Manager Visa Europe Schweiz, in a public statement. “Given the iPhone population in Switzerland is extremely high, the launch of Apple Pay is sure to make it the most convenient mobile payment solution for Switzerland.”

Retailers won’t need to make any changes to point-of-sale infrastructure or terminals. Apple Pay will be accepted wherever Visa contactless payment is currently accepted, as it utilizes the same technology. Throughout Europe, contactless payment has grown in popularity. Since just a little over one year ago, Visa Europe has facilitated more than 3 billion contactless payments. In fact, this form of payment is so popular, contactless payments via smartphones and cards now represent approximately 20 percent of Visa transactions at payment terminals. Since 2014, usage has more than quadrupled, increasing from 4.1 percent to 21.1 percent.

Apple Pay promises that privacy and security are at the heart of its service. The payment card details for the Visa card added to Apple Pay won’t be stored on Apple’s servers of the device. Instead, Visa will generate a device account number, which will be assigned and stored on the device. This device account number or unique token protects consumers because they can be utilized for payment with direct access to card information or an account.

In the case that a token-carrying device, such as an iPad or an iPod is lost or stolen, the associated token can quickly be disabled, protecting against theft. This can occur without a need to cancel a card or have the card reissued because information hasn’t been compromised. Apple Pay users are able to enjoy all of the perks of a credit card without the fear of digital fraud or theft. The tokenization service is rooted in privacy and allows for Visa cardholders to select the card currently associated with iTune or a new card.  

Apple Pay is a digital wallet and mobile payment service developed by Apple Inc., allowing users with iPhone 6, 6 Plus, iPad Air 2, iPad Pro and iPad Mini 3, Apple Watch-compatible devices, and similar devices. The service was initially announced during an Apple’s iPhone 6 event on September 9, 2014, after Apple CEO Tim Cook described the magnetic stripe card payment process on credit cards as an  “outdated and vulnerable magnetic interface”, hosting “exposed numbers”, and insecure “security codes.”

Apple Pay has been integrated into the payment services for a number of iPad and iPhone applications, and it’s been launched in Canada, Singapore, the U.S., U.K., China, Australia, France, Hong Kong, Spain, and now Switzerland.

RepreZen Helps to Quickly Design and Deliver World-Class APIs and Microservices in a Fraction of the Time

studiologo_with_trademark-150dpi-Padded-800x257RepreZen, the first fully integrated API design workbench, helps to quickly design and deliver world-class APIs and microservices in a fraction of the time. Selected for the premier accelerator Startup Bootcamp FinTech in early 2016, the application program interface designer worked on their strategy over three months while exploring potential engagements with  SBC FinTech partners, including MasterCard, Deutsche Bank, Thomson Reuters, Santander, and others.

The accelerator facilitated the diverse and talented team, connecting to program mentors and the Startup Bootcamp’s extended network. The were also able to partially work in SBC’s Silicon Alley workspace with a handful of other promising fintech startups. During the Selection Days weekend event, the RepreZen team attended an engaging series of meeting with sponsors and mentors. The team, which includes Ted Epstein, CEO of RepreZen, Integration Lead Andy Lowry, and CTO Tanya Fesenko. participated in an orientation, and pitch and presentation training.

Even if RepreZen hadn’t been selected by the accelerator, the preceding weekend had already plied attendees with useful introductions and insights. Some important that was reaffirmed through chats with enterprise IT professionals was API Management helps, but only after API design and implementation; integration is on the critical path for every strategic IT investment; and an API design platform that addresses interface mismatch at the source. Following gruelling interviews and meetings, the ReprenZen team spent at Tavern 29 while the Startup Bootcamp Fintech partners deliberated. Partners then returned with hugs, champagne, and handshakes, announcing that RepreZen had been selected, sharing the honor with nine other startups.

ReprenZen provides an integrated environment that harmonizes API designs, brings API design into focus for an entire team, and it generates APIs that are comprehensive and clink into client apps. RepreZen API Studio is said to “empowers software teams to define their API contracts, specifying the standard models, methods and patterns that make their APIs work together.” Users have also said that it’s an ideal tool to design and document REST APIs because the modeling environment is intuitive, allowing for users to focus on the architecture and functionality of an API resource model.

RepreZen API Studio has everything you needed to design, document and delivers end-to-end API solutions.