Will the next financial crisis be caused by finance or cyber? | FinTech Summary Issue 78
Cyber security is one of the biggest ‘new’ global problems that have arisen lately. During financial crisis everyone wanted to buy as much property, sell as many financial products; make as much money. The currency has shifted from dollars, pounds, and yen to ‘innovation’. The financial sector is trying to score as many innovation points as possible. FinTech is trying to get as high on the ‘new and cool’ scale as they can. Are we taking the necessary precautions building these new features and products? Are we cutting corners to ship as soon as possible? These corners tend to be things that are not identifiable right now, such as security holes, until they are the only thing that matters. Global reliance on data and the internet is growing exponentially. Is it likely that next major crisis will be caused by cyber security failures, not finance? (Hint: watch Mr. Robot on Amazon Prime Video for some clues — great show!)
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How hackers hijacked a bank’s entire online operation
By Andy Greenberg
The traditional model of hacking a bank isn’t so different from the old-fashioned method of robbing one. Thieves get in, get the goods, and get out. But one enterprising group of hackers targeting a Brazilian bank seems to have taken a more comprehensive and devious approach: One weekend afternoon, they rerouted all of the bank’s online customers to perfectly reconstructed fakes of the bank’s properties, where the marks obediently handed over their account information. Kaspersky researchers believe the hackers may have even simultaneously redirected all transactions at ATMs or point-of-sale systems to their own servers, collecting the credit card details of anyone who used their card that Saturday afternoon.
Why insurers need insurtechs to improve digital experience
By Danni Santana
Large insurance incumbents are not agile enough to build out top-notch user experiences without the help of insurtech startups. There are two answers to insurtech disruption: build capabilities in-house or partner with industry newcomers with an option to buy at a later date. The latter submits all user experience control to insurtech startups. However, it is a risk Munich Re feels it has to take. Most consumer-facing websites do not ask customers for basic information they can easily scrape of Facebook profiles. They are also mobile-first and include some sort of chat function. In return, Munich Re offers startups capital, product design capabilities, and global multiline capacity — the ability to expand businesses across state and country borders. At some point startups will want an exit and we will think about whether we will be their exit.
Sweden going cashless
By Chris Skinner
For as long as I can remember, I’ve been hearing about a War on Cash. The war, as illustrated by India’s recent demonetization, is not on cash itself but on the illegal use of cash and, by association, the fraudulent creation of cash. Both fraudulent notes and coins along with large cash denominated amounts transferring between criminals, spurs the governments of the world to try to get rid of cash. Things have changed in the last seven years though, thanks to mobile and contactless payments. And astonishingly, about 900 of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits — and many, especially in rural areas, no longer have ATMs. Circulation of Swedish krona has fallen from around 106 billion in 2009 to 80 billion last year. This is why the world’s oldest central bank, has now announced that it’s exploring the concept of a digital currency (the eKrona) to accompany its Swedish kroner notes, which could ultimately save tourists a trip to the currency exchange desk.
Finding common ground between legacy systems and insurtechs
By Joe McKendrick
“Worlds colliding” seems like an apt way to describe the meeting of the minds between insurers and Silicon Valley’s free-wheeling digiterati. But it’s been happening lately, big time. The verdict? Insurers have ‘no choice’ but to get on board. True to the spirit of disruption, many of these new technology ventures have made their moves fulfilling needs the large established insurers have been overlooking. Large insurers are sitting up and taking notes. Of course, it should be noted that Silicon Valley is just as much a state of mind as it is a physical location in California. All across the world, companies are seeking to deploy technology to address business opportunities and problems in new ways. By all recent indications, insurance is becoming part of this movement. The spirit of Silicon Valley lives in Chicago, Boston, Berlin and Bangalore as much as it does in San Jose.
Originally published at FinTech Summary.