The Importance of Innovative Fintech in Smart Cities

Photo by Kostiantyn Stupak from Pexels

According to statistics from the UN, 55% of the world’s population lives within an urban environment. This is expected to spike to 68% by 2050 and most of these metropolitan residents will be under the age of 29. 

It’s no secret that today’s population, youth or otherwise, live fast-paced, digital lives with a sense of urgency about their day-to-day, which is only expected to heighten in time. 

The only way to tackle modern-day challenges such as ageing infrastructures and to keep up with the expected trajectory of our hurried digital lives is to develop these urban territories into Smart Cities.  

What is a Smart City?

Smart Cities were once a hot topic in the media, but despite the need for them becoming more prevalent, the media buzz and conversation has died down. 

A Smart City utilises the latest innovations in IT and technology to enhance the efficiency and performance of modern metropolises, and improve the ease and quality of life for the inhabitants of the city. 

The focus is on combatting the obstacles or downfalls that exist in modern society and urban environments as we know them. This includes using technological advances to better transportation, energy, utilities, waste management, resource consumption, public services, overall costs and much more. 

The cost of implementing and enabling Smart Cities is expected to almost double within a four-year window. The International Data Corporation estimated Smart City costs in 2018 at US$81 billion, and this is set to drastically rise to US$158 billion by 2022. 

What is the Vital Role of Fintech in Smart Cities?

Some of the best Fintech innovations were purposely designed to simplify procedures that have become unnecessarily complex over time – such as banking – or services that no longer satisfy consumer demands or needs; online shopping and international money transfers, for example. 

Fintech start-ups always have the same end goal in mind. That is to provide consumers with a product or service that allows them to achieve the same outcome, but in less time, with fewer steps, for cheaper and with more transparency than previous solutions.

Whilst there are many benefits of Fintech in a Smart City, two standouts are quicker and simpler payments make for happier residents, and better international transfers and banking broadens the city’s access to a global market.

How Some Cities are Using Fintech 

London

The most glaringly obvious entry route into Fintech for the city of London is with their transport systems.

Transport for London (TFL) had a full digital shift across all transport systems in July 2014, and the organisation has been a cashless operation ever since. Since the switch to contactless payments only, TFL has become more efficient with far fewer delays, cheaper journeys and made the process of boarding much faster for passengers. 

Singapore

Fintech is central to Singapore’s ambitions to become a Smart Nation with a “Smart Financial Centre” at its heart. Part of the country’s continued efforts to achieve a Smart Financial Centre includes using innovative technology to create new opportunities, increase efficiency and better manage the country’s financial risks. Singapore also strives to eventually become a cashless nation.

Estonia

Estonia is possibly the most forward-thinking in their approach to becoming a Smart City thus far. They have abandoned traditional methods of identification and they now offer government-supported digital identities. The E-Estonia movement has been linked to many of the country’s financial institutions and companies to provide easy and convenient banking services to residents. 

While we still might be some years away from our first fully Smart City, many are definitely making waves and on the right path to becoming truly smart. 

A common thread between each advanced city that is leading the way for others is their use of Fintech. Incorporating innovative Fintech is a must in order to become a Smart City, it enables easy international business, makes daily life more convenient for residents and encourages the efficient, economical and eco-friendly operation of a nation. 

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Cybercrime ”“ protecting the weakest links

Blog written by Anthony Rafferty, Managing Director at Origo

“The FBI say that cyber criminals are deliberately targeting financial services firms. They reckon that has increased by over 100% in the last year. Given that these criminals are operating all over the world, if you think they are only going to target the US, then you need to think again.” 

This was the opening statement from Ian McKenna, Managing Director of the Financial Technology & Research Centre (FT&RC) for a session on cybercrime at the centre’s recent Empowering Advice Through Technology 2020 event in London. 

The size of people’s pension pots and investment portfolios make pension providers, savings and investment companies and platforms, and financial advice firms ”“ amongst others ”“ prime targets for criminals’ tactics, such as Identity Substitution Theft.

Ian pointed out that over 60% of the FCA’s business plan for 2020 was focussed on cybercrime. Likewise, the Information Commissioners Office (ICO) is focussing on firms where “significant risk” exists, “which is going to be within financial services firms.”

Ian was introducing a panel session including myself and Paul Holland, CEO and founder of Beyond Encryption, to talk about the dangers of cybercrime for the financial services sector, in particular, that section of the sector relating to provision of financial advice and planning.

Cybercrime has been raised as one of the top concerns for financial advice businesses in 2020. Keeping client data safe within a firm is not the problem. It is the passing of information, invariably personal and confidential in nature, between client, adviser, platforms and providers, i.e. where the information moves outside of a company’s security systems, which invariably is the weak point that cyber criminals exploit.

Emails are a case in point. Quite often sensitive information is emailed within the body of an email or in an attachment. Yet sending an email is like sending a postcard through the post ”“ it can be easily read and altered. We hear too many stories about emails being intercepted and data stolen and then used to commit cybercrime. Personal data accessed in this way can be used to scam payments and commit identity fraud, sending of false invoices, requests for passwords and carrying out malware attacks being just a few examples.

Paul Holland flagged the example where conveyancing solicitors’ emails asking clients for final payment on property sales have been intercepted and the bank account details changed. The client’s money is sent but never received because it has been syphoned off by the criminals. 

The risks to businesses can be huge. Not only could they be subject to public censure, fines and costs but it can be highly damaging to consumer trust in the business. 

We recognise that financial services companies are becoming more aware of their regulatory and compliance obligations, particularly under GDPR, MIFID II and the recently introduced Senior Managers and Certification Regime (SM&CR) legislation, which make the individual accountable for decisions in the firm. In this regulatory environment, deploying email security into any organisation is vital to reduce business and senior management risk as well as to build and maintain trust with clients.

The same applies for B2B companies. Would you prefer to do business with a company where its emails are secured or one with non-secured emails? Which would give you more confidence that they are handling your data and that of your clients’ in a secure and responsible manner?

With firms able to be fined heavily for data breaches, and as cybercriminals become ever more sophisticated in their methods, we believe protecting client data will be an even greater focus for financial services companies in 2020, with businesses of all sizes looking to greater protect their email communications.

Origo has worked with Beyond Encryption to launch a new secure email messaging system, Unipass Mailock, for financial advisers, investment and savings platforms, providers and consumers. It enables users to securely communicate sensitive personal, financial, medical or policy information to their clients efficiently and securely ”“ using military-grade encryption and unique identity authentication capabilities ”“ safe in the knowledge that only the intended recipient can read and reply to the message.

We are making the solution available to over 45,000 financial advisers already using the Unipass Identity service, as well as millions of consumers. By de-risking the industry’s communications our aim is to help protect consumer data as well as business reputations.I’m also delighted to say that Unipass Mailock picked up the Best in Class’ award at the FT&RC technology conference.