October 2016 -

October 2016 -

Disrupting Fintech – Blockchain

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blockchain

Bitcoin has been disrupting the FinTech world since the release of Satoshi Nakamoto’s paper “Bitcoin: A Peer-to-Peer Electronic Cash System” in Oct 2008. Its growth has been steep in the recent past. In the last year alone, Bitcoin and its allied technologies have attracted investments over USD 1 Billion. But, Bitcoin is just the tip of the iceberg and an implementation of a greater technology that powers it. To understand Bitcoin, we must first understand Blockchain, the underlying technology that powers the Bitcoin ecosystem.

In simple words, Blockchain is a publically distributed, synchronized and secured database which is used to store and record transactions. But it’s not simple as it sounds. So, let me try to decode it.

The Blockchain system consists of the following two basic building blocks.

  1. A Block is a set of information such as a transaction record that is represented in the form of computer codes. If the Blocks are related to each other, they are chained to each other using a digital signature, forming the Blockchain.
  2. A Node is a computer system that’s interconnected to the network just like any other computer on the internet. Each node in the Blockchain system carries an identical copy of a distributed ledger (database) which holds the record of all transactions that are made in the system.

What makes the Blockchain system powerful is its anti-counterfeit mechanism that prevents fraudulent transactions. Whenever a transaction is initiated by a node in the system, a Block with the relevant information is created with the initiator’s digital signature. But, for the transaction to complete, the block must be verified by all the nodes in the system and get updated in their respective ledgers. A transaction doesn’t pass through even if a single node disapproves it. To make a fraudulent transaction, all of the nodes in the system must be hacked at the exact same time to modify the ledgers. This is almost impossible even with enormous computing power, as the keys in the ledgers are cryptographically encrypted. Even synchronizing the ledger between the nodes necessitates a clever mechanism. All nodes compete with each other on a complex mathematical problem based on the previous transactions. The ledger of the winning node is taken as the base and synced with all other nodes in the system. This security feature makes the Blockchain a fool proof system highly invulnerable to cyber-attacks.

Blockchain has a great potential to transform the Financial Industry, predominantly in the areas of Banking, Payments, and Capital Markets. The following are a few of its disruptions in the financial industry.

  • Blockchain-based Cryptocurrencies like BitCoin, LiteCoin and Ripple are evolving, which might replace paper currencies in the future.
  • R3, a Blockchain company was formed by a consortium of more than 70 of the world’s biggest financial institutions to perform research and development of Blockchain usage in financial systems.
  • Nasdaq, the second-largest stock exchange in the world has come up with Nasdaq Linq, a Blockchain enabled trading platform.
  • Distributed consensus, one of the core caliber of BlockChain has enabled fast and low-cost transactions to take place without the intervention of a 3rd party. Few payment protocols like Ripple Protocol and payment applications like BitPay have also evolved out of it.
  • The programmability of Blocks has given rise to a few Smart Contract platforms such as RSK and Ethereum. These platforms enable self-enforcement of contracts between two parties once the terms are met, without the interference of a third party.
  • The linking ability of Blocks can be used in provenance tracking. This comes handy when verifying the authenticity of certificates and in conducting audit trials.

This revolutionary technology is all set to transform the BFSI sector and it’s not too late to catch up with it.

About Market Simplified: Market Simplified is a thought leader in handcrafting custom solutions by continuously innovating and simplifying finance. We have maximized the revenues of industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank and National Stock Exchange of India by providing enhanced and sustained user engagement through Experience Engineering.

About The Author: Gokoulane Ravi is a foodie, technology enthusiast, and a developer turned marketer with more than 5 years of experience in the space of mobility. When he is not working, he likes to read, write, run and cycle.

Innovation in Mobile Banking – Part 3 – Contactless Payment Solutions

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digital-banking

[The last post in this blog series covered emerging authentication techniques in the mobile banking space. Now, we will take a deeper look at contactless payment solutions.]

Since the early 1960s, the magnetic stripe or the MagStripe cards have revolutionized the electronic payment (e-payment) industry for more than 30 years. Due to the lack of security features, Mag Stripes became vulnerable to identity theft, causing huge financial losses to both the customer and the banks. Then, in the 1990s, more secure Chip Cards (EMV Standard) disrupted the e-payment industry. Unlike Mag Stripes with static information, the Chip Cards encrypted the stored information, making them tougher to replicate. Advancement in technology and customers’ demand, especially millennials pushed the banks and the e-payment industry to come up with a more secure and innovative payment solutions.

Near Field Communication (NFC) is a technology which enables two compatible electronic devices in close proximity (within 5cm) to transfer small amounts of data between them using a predefined set of communication protocol. Though NFC has got various applications, this technology is predominantly used in contactless payment solutions. The following are the top trending contactless payment solutions.

Smart Cards

The contactless payment cards are just like the usual EMV Standard Credit Cards or Debit Cards but equipped with NFC technology. This card helps customers make quick and secure transactions at a POS, as it doesn’t require a pin input for smaller transaction amounts. Visa’s Pay Wave and MasterCard’s Pay Pass are the leading contactless smart card technologies spreading globally.

 

Smart Phones

Many banks have added payment feature into their mobile banking application which employs NFC technology in the smartphones to communicate with the NFC-enabled merchant devices. Most of these payment apps use Host Card Emulation (HCE) technique which emulates the data transmission through a physical card to process the payment. The key advantage of this mechanism is that it uses additional security features like tokenization capability, which smartphones have to offer.

 

Smart Wearables

Technology advancements not only made the mobile phone smart, but also wearables like watches and rings. Smart Wearables come in various form factors such as fitness trackers, smart watches, and smart rings. Being one of the fastest growing markets, the smart wearable market has grown 18.4% since last year. Most of the Smart Wearables are enabled with NFC technology that powers most of the contactless payment solutions. These wearables either work standalone or synced with a smartphone to make payments.

 

Innovative Payment Solutions is one of the key areas in which banks must concentrate as they have a wide array of applications that drive transaction and experience at the retail end.

To Be Continued…

About Market Simplified: Market Simplified is a thought leader in handcrafting custom solutions by continuously innovating and simplifying finance. We have maximized the revenues of industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank and National Stock Exchange of India by providing enhanced and sustained user engagement through Experience Engineering.

About The Author: Gokoulane Ravi is a foodie, technology enthusiast, and a developer turned marketer with more than 5 years of experience in the space of mobility. When he is not working, he likes to read, write, run and cycle.

Fun @ Work – Ascendas Singbridge Livewire 2016

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Ascendas International Tech Park, where Market Simplified is located organized its annual cultural and talent event “Ascendas Singbridge – Livewire 2016” between 28th and 30th September 2016. The three-day extravaganza brought together many members of various organizations in the IT Park to compete in the following categories.

  • Singing – Solo
  • Singing – Group
  • Dance – Western
  • Dance – Folk
  • Fashion Show
  • Dumb Charades

MSIL, being a sportive organization with no lack in awesome and talented employees, sent a bunch of MSFERs to participate in all the above categories, except the western dance. All of our participants gave their best while performing on stage and proved themselves a tough competition to the others. It would be a great fault on my side if I fail to mention the awesome singing, energy packed dance performance and stylish walk on the ramp by our people. Hard luck, only a few won the prize. In solo singing, Vasanth Jayaraman secured 2nd place. In Dumb Charades, our team consisting of Akshaya Sivakumar, Moushmi Nirmal, Siva Chairma Prabhu and Vijay Ravi secured 3rd place.

Following are some of the scenes from the event.

Great show team. Hope we win more next year.

About Market Simplified: Market Simplified is a thought leader in handcrafting custom solutions by continuously innovating and simplifying finance. We have maximized the revenues of industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank and National Stock Exchange of India by providing enhanced and sustained user engagement through Experience Engineering.

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