Financial Services

From headlines to heart and soul: How do banks engage with startups in a meaningful way?

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This post is sponsored by Money 20/20

Every day there are partnership announcements between banks and startups, but how many deliver enduring value? A relationship provides obvious benefits to both parties: for the startup, networks, access to customers and finances; and for the bank, the ability to accelerate the pace of innovation and learn from the startup’s approach. The culture, mindset, language and structures of both types of organisation are diametrically opposed in most cases, so what are the key ingredients required to develop a long lasting relationship that goes way beyond the headlines? I will be sharing my thoughts and experiences on the subject from the SpareBank 1 and mCASH deal, hackathons on our APIs and how we are creating a culture for fintech collaboration from within the bank. I will be joined by a great panel of both bankers and fintech professionals from around the world. More information on the panel session here.

Make sure to check out my friends at IKT Norway who will be attending with fintech forest, a shared stand for seven selected Norwegian fintech startups. I  have talked to a lot of my fintech friends and exciting startups in the last couple of weeks now that the event is approaching, and everything points to an exciting week of fintech. I look forward to seeing the majority og the fintech community at Money 20/20 Europe next month.

 

 

 

 

 

 

 

Will Iran experience a financial revolution following the lift of nuclear sanctions?

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One of the purposes of the fintech revolution is financial inclusion – providing financial services to the underbanked segments in both mature and emerging markets. This is often synonymous with retail banking for the developing world where only 41 percent have a bank account. But there are vast opportunities for both incumbents and fintech startups every step of the way when targeting various underbanked segments.Ffrom targeting the SME market through use of blockchain  to exploring opportunities created by political changes. The lift of Iran sanctions after the nuclear deal is one of those opportunities.

Iranian banks make up the world’s largest islamic banking system with $482 billion in assets under management. But the banks have accumulated non-performing loans at the risk of not being repaid in the billions. The banking industry has also been burdened by high-profile embezzlement scandals, and is ranked as the highest risk country in money laundering/terrorism financing. In addition the countries banks were banished from SWIFT in 2012 because of nuclear sanctions, terminating transactions worth $35 billion to/from Europe alone.

With a population of nearly 80 million, where 70% is below 35 years and a smart phone penetration predicted to reach 50% by 2016 there is a big potential to improve and reinvent the financial services industry.

With 4 to 5 million Iranian expats worldwide, inbound remittances revenues alone amount to $1,4 billion according to the World Bank. The widespread use of Hawala networks for remittances makes this amount difficult to track, and some claim that the total amount is four times the World bank estimate. The lifted sanctions could also boost trade finance revenues, as well as give foreign investors access to the Teheran Stock Exchange and direct investments targeting 80 million potential customers, $35 trillion worth of petroleum reserves and deep infrastructure needs. Iran has already implemented a national interbank payments system, Shetab which is enabled for credit and debit cards, e-commerce and mobile payments as well as Satna for RTGS for high value payments.

These are all examples of the possibilities related to traditional financial services, but the potential should could might as well include services live sharia-compliant P2P-lending.

As a result European, Chinese and Indian banks are exploring the potential of entering the Iranian market. But there are still major obstacles along the way. Banks operating in Iran need to regain access to the SWIFT messaging network, a process predicted to take several months subsequent of the end of sanctions. In addition it is imperative that the Central Bank of Iran meets anti-money laundering standards in order to create a regulatory system that  ensures the commitment to stay compliant to international standards.