Snippings

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Widely recognised as a pioneer of data privacy as a result of GDPR, the European Commission announced new measures that came into effect in June 2022 and will apply in full from September 2023.

The Data Governance Act (DGA) acknowledges that data-driven innovation will deliver significant benefit to its citizens and the economy and looks to ensure equitable access to data while ensuring “data portability and interoperability, and avoiding lock-in effects.”

To facilitate this, the DGA outlines a new category of service provider – a Data Intermediary – that has a fiduciary duty to act in the interests of data subjects

From The carrot and stick of data privacy. Which one will you choose in 2023?:

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the Australian Transaction Reports and Analysis Centre’s (AUSTRAC – the Australian government’s financial intelligence agency) customer identification procedure does not require organisations to copy documents. The guidance is clear “you don’t have to copy documents (for example you can record details of a driver’s licence or passport rather than photocopying them)”.

From The carrot and stick of data privacy. Which one will you choose in 2023?:

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My wife just failed the KYC check for a savings account in the U.K. because her driving licence had expressed the month previously (which, of course, she had no idea about since like more normal people she has never looked at the expiry date on a driving licence) and so could not open the account. I was tempted to call the bank and ask them why they needed the driving licence at all, since she already has accounts with U.K. financial institutions and why her ability to drive had anything to do with her ability to save.

In a sane world, the savings bank would have bounced her via open banking to her current account holder and paid a small interchange fee to obtain a cryptographic proof that my wife is resident in the U.K., is over 18 and has been KYC’d already.

Single Euro Payments Area (

) Payment Account Access (

) is the newest European Payments Council (

) scheme. 

covers messaging functionalities allowing the exchange of payment accounts-related data and facilitating the initiation of payment transactions in the context of ‘premium1’ services provided by asset holders to asset brokers.

What are the main benefits of the
scheme?

Arturo: Some of the key benefits of the
scheme:

It builds on investments done in the context of the
.

It is managed as a scheme developed collaboratively by the retail payment industry (supply and demand) and the end-user community as represented by the Euro Retail Payments Board (
), and with the support of the
institutions.

From SEPA Payment Account Access scheme: going beyond open banking | European Payments Council:

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The latest figures from the UK show that overall instant payment volumes grew by around a quarter in the last year and “single immediate payment” volumes were up by a fifth in volume and quarter in value, showing that more and more people are making payments through the system and they are sending bigger amounts from account-to-account. Open banking-initiated account-to-account payments (eg, small businesses paying taxes, for example) are a key driver.

The future is certainly bright for Faster Payments – continued growth from Open Banking A2A payments, payments initiated by overlay services such as Request to Pay and Variable Recurring payments is certainly on the agenda. The growth is likely to be bolstered through the introduction of new Faster Payment types (or flavours) as part of version 1.0 of the planned New Payments Architecture and, perhaps, through a future planned migration of Bacs Direct Credit payments into the NPA.

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The ambition, per Austin, should be for a fully digitised system that reduces cost, enables two-way communication and equal participation with the entire shareholder base and proper real-time analysis of the shareholder register.

From Let’s fix the dodgy plumbing of our shareholder democracy | Financial Times:

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The jargon around this issue — dematerialisation and disintermediation — is so off-putting that Austin came up with a broader alternative: digitisation. But the basic problem is simple: listed companies don’t know who their ultimate owners are, and nor really does anybody else.

His review found that the average FTSE 100 company has a third of its investor base “unallocated” — effectively unidentifiable — according to Refinitiv data. In the benchmark index, 29 companies have more than 40 per cent unallocated. This is a lack of transparency at best. Companies themselves might have access to more information about their investors. But in reality, say practitioners, it is far from complete: this is part of the reason that certain corporate actions take such an interminably long time.

From Let’s fix the dodgy plumbing of our shareholder democracy | Financial Times:

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Making money has proven an elusive goal for the neobanks. Just 5% of about 400 global neobanks identified by research firm Simon-Kucher and Partners have reached a break-even point,

From The neobank business model: Too dependent on interchange? – Protocol.

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My good friend Daniel Gusev, a through scholar of the period, notes the medieval and early Renaissance fintech innovations in Florence. In essence, a major extension of cashless transactions by replacing specie or bullion transfers by credit transactions verified by audit, backed by sound accounting methods across numerous industries — and secured by personal trust and reputation.

 

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Altogether the elements of the system — the social changes underpinned by propagation of tools and practices of their use — supported Florence premier position on the European trade market: the first embedded fintechs one can recognise in the activities of trade houses of Italian merchants:

The volume of trade was so big that even a theoretical fallback settlement in coin was not possible: there was just not enough coin to cover the volumes: — and from that came another benefit to the international trade: massive use of bills of exchange — further lowering of cost, risk — and resulting interest rate charged: Florentine bankers additional innovation was the creation of an accounting unit — to be compatible with other markets dominantly duodecimal (12) systems of weight and value:

From Fintech in Early Renaissance Florence: | by Daniel Gusev | Fintech Blog | Dec, 2022 | Medium.

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Open AI is at 10 exaflops right now vs. 1000 for the human brain.  Probably going to equalize in five years.

From One look at our future – Marginal REVOLUTION.

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Although the financial services sector has grown over recent decades, it employs the same number of people and a smaller proportion of the UK workforce than it did 30 years ago (Hutton, 2022).

The industry has been a big adopter of new technology, with the result that it can produce more output with less labour. This means that financial services have one of the highest levels of labour productivity of any sector in the UK.

From How important is the City to the UK economy? – Economics Observatory:

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