Citadel Advantage News Digest - Issue #158

Read / Subscribe to the “Citadel Advantage News Digest” Issue #158 - In this edition -

• Green Loans: A Fast-Track Method to Be a Banking ESG Leader
• Cryptocurrency Exchanges, Regulation and Bank Runs: A Summary
• The whole point of money is to NOT know your customer - Chris Skinner's blog
• Just 8% of Americans have a positive view of cryptocurrencies now
• 'Bank of Twitter': Is Elon Musk Spitballing Or Could It Really Work?
• Why Crypto’s Crash Hasn’t Spilled Into Other Markets
• Elon Musk Is Hiring Relatives at Twitter in Literal Nepotism

NEWS about World Affairs, Banking, Fintech, Payments, Business, Blockchain, Crypto, Money and more…

Check it out HERE

Why is identity important in financial services? - Decoding: Banks - Episode 5

From 11:FS. There are one billion people globally who can't prove their identity. That's a big problem for accessing financial services. Banks need to know your identity for a number of reasons. It helps them to combat money laundering, which they spend £28.7bn on every year. So you know they're not messing around. But why else? What is KYC? And does financial services have an identity problem?

Fintech is only 1% finished

Fintech is only 1% finished. But what do we mean by that? 

Simon Taylor, Head of Ventures at 11:FS takes us through the landscape of financial technology in this Lightboard edition of 11:FS Explores. When you take a look at the customer numbers that financial services brands are serving in any particular segment, it’s apparent that the majority of UK Fintech brands currently operate within areas that have high customer numbers, but low value-per-customer. 

For example, areas with high customer numbers such as retail are being served by market-leaders such as Monzo, Starling, and Revolut. Retail is one of the most over-served markets by digital banking providers at the moment - but considering 12 million UK customers have a digital bank and the majority aren’t moving their salary into it, there is still a lot of work to be done, and that shows it. But the biggest edge in recent times is the massive changes to the supplier landscape - from onboarding and KYC, to payments, to Banking as a Service. 

Prospective fintech companies now have the chance to assess the opportunity space for their proposition and to get a full view of the suppliers available to them. With such a robust supplier landscape emerging - it means that any company can be a fintech company. The market has blown wide open.

It's not the technology - Why banking is broken -Ewan Silver - 11:FS

When people discuss 'banking being broken', they often refer to the technology itself. As Ewan Silver says - that isn't necessarily the case. 

The fundamental flaw within banking at the moment is the way that banking products are treated within the organization. A customer can get a retail bank account, a credit card, and a mortgage from one bank. 

They would expect this to be a seamless process, as it looks like one entity - but from the bank's perspective, these are three different businesses entirely. 

The banks have no single-view of a customer. This was OK for a while. All banks worked in this way, so there wasn't exactly a high bar set for them, 

But now, with challenger banks offering realtime payments and notifications, and GDPR regulations enforcing banks to enforce KYC across entire organisations, the banks NEED a single customer view. 

And they can't seem to get there easily. So what are the potential solutions? Ewan explains it all.

What Percent of Financial Services’ IT Budgets Are Devoted to Regulatory Technology?

• As of 2017, the cost of regulatory compliance is equal to 14.3% of IT budgets on average
• That’s a 30% increase in compliance costs over the last 6 years
• The regtech market’s compound annual growth rate is 25% through 2023, growing to revenues of $7.2 billion
• Solution categories in the regtech market include:

• Data management
• Reporting
• AML/KYC
• Risk management
• Records management
• Change management
• Governance

• More than $9 billion was invested in regtech firms between 2014 & 2018
• In 2018 alone, $4.5 billion was invested in reg tech firms
• The bulk of the regtech investments have been in the AML/KYC space

Why Banks Need Standardized Anti-Money Laundering Programs

Banks Need Strong, Standardized Anti-Money Laundering Programs to Fight Financial Crime

From Forbes –

“Financial institutions are working hard to fight financial crime and bank fraud driven by demands to protect the bank’s assets, as well as by regulatory compliance. One area of specific focus is that of Anti-Money Laundering (AML). For many institutions, there are several challenges to creating a sustainable AML organization – one that can respond to regulatory reporting mandates and provide information to support “business as usual” demands – while also finding, developing and retaining the talent needed to accomplish these critical activities.”

Read more>>

Challenges in AML and KYC

The burden of regulatory change  

From Finextra –

“Neil Jeans, Financial Crime Compliance & Risk Consultant, Thomson Reuters, outlines the challenges in the AML and KYC space, and discusses the issues of data in managing money laundering risk and ongoing due diligence.”

Watch the interview>>