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What is PaaS? What role does it play in the financial institution?

With the financial institutions continuously balancing the competitive demands for the investment roles in their tech maintenance, compliance, innovation and with the delivery of the value added services, everything feels like a necessity rather than a liability and that can be difficult. For some institutions services like outsourcing strategy payments can enable them to pose a better balance in their investments which can focus more on the rapid delivery of the brand new capabilities and ideas hat add more base value.

The industry is facing multiple changes and this is making it hard to shift the focus to new innovations. It has become a continuous process of the customers to expect a continual product innovations and to have this experience across various channels. There is also structural changes such as convergence of payments, which is also becoming a barrier.

Now witnessing the challenger banks and the fintechs with full implementation of digital tools, such as the cloud in order to optimize their processes and produce transformational customer experiences. Snowballing the choices of availability for the customers is one way to initiate the payments through card and non-card payment rails and is leading to the further demand for revolution and change. As a result, many financial institutions are reviewing the costs and operational effort required to maintain payments technology in-house and considering how new innovations can be implemented. These institutions have an opportunity to leverage the ideas to stay ahead of time in these competitions. And this can come in the form of the Payments-as-a-service (PaaS). PaaS is bringing additional benefits such as savings in capital costs, opportunity costs and compliance as well as reduction of off-costs with is linked with the infrastructure or tech upgrades.

A financial institution may have to focus more and invest more time and effort on the customer innovation and experience to drive that base value and outsourcing payments to PaaS can allow this and make it easy too. PaaS can also help lead other benefits such as reduced capital expenses and increased free cash flow. Also helps to navigate the present environment in a further direction and the capital investment can be thoroughly analyzed. Adding to this. One more benefit of outsourcing to a PaaS is its ability to leverage its expertise. Investing in the robust platforms is one of the many areas which is crucial to focus on, for the financial sectors to consider and it is a primary business for the PaaS providers. So it is the job of the providers to regularly keep in check and hire the apt person to do the jobs which support and innovate the tech further.

As payments become more commoditized and traditional payment revenue streams decline, the case of recollecting the payment processing internally may become tighter.

This Covid-19 pandemic has released payments innovation into the limelight. To completely understand how the changes should be implemented which will respond to this lateral shift, a complete taxation of existing technology, and its affects in the business for the long-term is a must. Adopting PaaS will bring about a wealth of financial and operational benefits which will help in enabling a financial institution to be alert and strategic so that it can dedicate more resources to novelty while providing services and experiences which customers expect and differentiate from the competition with the other challengers.

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AI role in customer experience in banking

The concept of banking first sprung up around 8000 BC. Then, there came various drastic changes to expand their services and innovate their business models. Artificial Intelligence (AI) and Machine Learning (ML) are applied to help banks and financial institutions nowadays. A survey by the Economist Intelligence Unit (EIU) showed that 77% of banking executives believe that the use of AI will ultimately differentiate between winning and losing banks.

This pandemic has triggered a sudden socioeconomic shift from physical to digital. There is a rapid switch to digital channels. Recent research by YouGov was conducted in June 2021. And that revealed that digital services have become the de facto way of conducting business and access services during the pandemic. EIU’s survey showed that enhancing the user experience through better personalisation ranked first in the most valuable uses of AI.

Customer propositions are no longer fit-for-all. It involves both banking and non-banking products and services. To identify the customers’ needs the banks must take an entirely new approach to innovation. They should adopt a customer-centric view. This starts with understanding the customer needs. AI makes it much easier to analyse customer preferences. The redesigning of customer loyalty program gives banks an accurate understanding of customer. Effective personalization offers customers not only better leads but also a more unique experience. The customer experience can be improved by applying AI. Banks must also build out their capabilities to strike new partnerships.

Businesses across all industries are working hard to retain their customers, including banks. AI can become a banking institutions’ superpower. This can take the customer experience to new heights, resulting in happier and more loyal customers. It will also reduce a bank’s operating costs and enable increased revenue per customer. To become AI First, banks must focus on streamlining their technology layer. They also require a strategy to engage customers through channels owned by them and their non-banking partners. Business and technology must work hand in hand, with cross-functional teams breaking up organisational silos.

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Amazon to offer insurance to UK businesses

The technology giant’s first foray into business insurance in the country, broker Superscript said that Amazon is going to start offering insurance to small and medium-sized UK business customers. Members of Amazon’s Business Prime program will be able to buy cover from superscript such as contents insurance, cyber insurance and professional indemnity insurance. Superscript spokesperson said that those would be underwritten by major UK insurers. A discount of 20% will be offered to current rates. This is to entice the businesses over to them.

50% of customers are prepared to buy insurance from non-traditional players. A recent survey of 12,000 people globally by consultants Capgemini showed this. Cameron Shearer, co-founder and CEO of Superscript, said in a statement that the insurance industry needs to bridge the divide between insurers and customers. Amazon’s move into UK business insurance comes after U.S. insurtech Next Insurance said that it was offering cover to U.S. small businesses. And that too via Amazon Business Prime. Molly Dobson, Country Manager for Amazon Business UK & Ireland, said in the statement that as the businesses come out of the pandemic, they want customers to have the best-in-class tools to run their business.

Financial institutions are worried that tech firms will steal their business. But industry sources said that the insurers and tech firms are more likely to forge partnerships. Because of the given difficulties and expense for outsiders in entering the highly regulated finance sector. Amazon also offers warranty insurance and “buy now, pay later” services in Britain.

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In NFT fantasy soccer game, SoftBank leads funding

Blockchain-based fantasy soccer game Sorare has raised $680 million. This is through a funding round, which is led by SoftBank. According to the company, it includes players such as ex-England international Rio Ferdinand and Spain’s Gerard Pique. Paris-based Sorare said that the investment valued the company at $4.3 billion. Sorare is an online game, since 2018. Here players buy officially licensed cards that represents soccer players. They can build teams and play against each other. This is based on the players’ performance in real-life games.

The cards are traded in the form of non-fungible tokens (NFTs). The market for NFTs has seen major growth in 2021. Michel Combes, president of SoftBank Group International, said that they think NFTs represent a new paradigm in the collectability, usability, and engagement with assets. This evolution from physical assets to digital assets is very powerful. This also creates a lot of exciting potential business models. NonFungible.com is a website that tracks NFT market data. According to them, Sorare is the largest sports-based NFT platform by sales volume. They are planning to open an office in the United States. So that they can expand into other games out of Sorare.

Nicolas Julia, CEO and co-founder of Sorare said that they saw the immense potential that blockchain and NFTs brought to unlock a new way for football clubs, footballers, and their fans to experience a deeper connection with each other. They believe that this is a huge opportunity to create the next sports entertainment giant. Since January 2021, there have been $150 million of sales on Sorare. The fundraising round was SoftBank’s first time investing in Sorare. SoftBank’s Latin America fund also contributed. Other investors in Sorare’s raise are such as venture capital firms Accel and Bessemer Ventures, Pique, Ferdinand, Antoine Griezmann and Spain’s Cesar Azpilicueta.

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