We’re happy to share that Beta-i has been named one of the 25 Best Financial Innovation Labs, as part of The Innovators 2019, an annual initiative by Global Finance magazine.
As an ecosystem builder in Lisbon, we’re are proud of the achievement. In the words of Pedro Rocha Vieira, our CEO and founder:
It’s naturally rewarding to see Beta-i again on such a narrow and prestigious list, which validates the work we’ve done. We are helping to reconfigure the financial universe, via fintechs, setting up programs like Pay Forward, with SIBS, or Protechting, which involves partners like Fidelidade, Fosun and Hauck & Aufhäuser, a German investment bank. This is an area where we identify new market opportunities, and Portugal can serve as a ‘sandbox’ for new business models and concepts in the financial area – for example, Brexit allows us to glimpse new opportunities. Startups like Feedzai, James, or Keep Warranty, are also making their way into this arena, which creates a more relevant cultural environment.
He also reminded that Portugal has a lot of opportunities to act as an innovation lab on testing new solutions: “There is an opportunity for countries like Portugal to position themselves to allow controlled testing of these technologies, especially in the context of the digital transformation of banks and the financial system, and I believe that’s where the role of Beta-i is, as a result of its commitment to innovation. We are also well positioned to replicate this experience in other geographies, and integrating the newly created Cybersecurity Working Group also allows us not only access but also the ability to influence and support the development of good practices. “
In its seventh edition, The Innovators recognizes entities that regularly identify new paths and design new tools in finance – the full report will be published in June.
“Financial institutions and governments worldwide are creating new spaces and modes of collaboration to better execute on financial technology,” said Joseph D. Giarraputo, publisher and editorial director of Global Finance. “Hubs, labs, centers, whatever you call them, they support innovations that deliver benefits to banks, their clients and society at large, nurturing both upstarts and stalwarts that excel in breakthrough thinking.”
The 2019 Innovators honorees will be recognized at the Global Finance Digital Banks and Innovators Awards Dinner on October 30 in Hong Kong. Here is the full list of honorees:
FINANCIAL INNOVATION LABS
CITY
Alior Bank RBL
Warsaw
Barclays Accelerator
Multiple Locations
Beta-i
Lisbon
BNY Mellon Global Innovation Centers
Multiple Locations
boostLAB Powered by BTG Pactual
Sao Paulo
Capital One Labs
Multiple Locations
Citi Innovation Labs
Multiple Locations
Cyberport
HongKong
DBS Asia X (DAX)
Singapore
Deutsche Bank Innovation Labs
MultipleLocations
Fidelity Center for Applied Technology/Fidelity Labs
The third edition of SIBS Payforward is on! The Bootcamp phase will occur from 13th to 16th of May in both Beta-i and SIBS headquarters.
Paying it forward
35 years ago SIBS started the startup way to turn into one of the World’s top Fintech innovators – SIBS has been providing new payment solutions and investing to perform in a constantly changing society, for the last 30 years.
Now it’s time to pay it forward by working with startups to test and grow in a global changing environment. That’s why SIBS is committing, for the third year, with a piloting program focusing on Fintech trends and payment solutions.
SIBS wants to embrace the possibilities of innovating together with other Fintech entrepreneurs, transforming the way businesses and consumers access and use financial products.
The Program
This open-innovation program aims to gather the best fintech startups to work in collaborating pilot with SIBS. For startups, this is an opportunity to join the most secure, modern, and reliable payment solutions player, who has a network of more than 300 million users.
For this edition, the program was looking for startups in technologies like Big Data, Machine Learning, APIs, IoT, AI and Cyber Security, that work in one of these for areas:
Security and Authentication
Client Behaviour and analytics
Payment Processes
Payment and future stores
The Bootcamp
The Bootcamp will happen between 13th and the 16th of May. To further improve collaboration between startups and SIBS, two days will happen at Beta-i, and the other two will happen at SIBS headquarters. Startups will get to know SIBS by being welcomed into their space.
The four days include workshops by the Beta-i team, on piloting and creating business case models, mentorship, talks by alumni of previous editions and several hours of co-work between the startups and SIBS.
The Bootcamp is an amazing opportunity for startups to get insights, mentorship and a potential partner. Like Denis Kiselev, CEO @SnapSwap, described:
We met amazing people. We learned a lot from them about the technology, about the market and about the product. So now we have a great user experience. It was mind-opening.
We can’t wait to meet all startups joining the program on this edition!
The Payment Services Directive 2 – PSD2 – is set to be fully implemented until the end of 2019, as banks must comply with all the regulations of the directive by September.
Although the impact cannot be measured as off now, we can see some of the changes happening already as bigger players are already taking notice of the impact the directive might have on the financial market: global fintech investment has doubled to €43 billion in 2018.
The goals of the directive
The professed goals of the directive include boosting a single market of payments for the UE, the reinforcement of safety, through the use of consumer authentication methods which comply with European standards and the accountability of payment service providers in the event of unauthorized payment transactions, more competition and innovation, by opening up the market to non-banks and innovative fintechs, and a more convenient experience for the customers, as a more consumer-centric view of the market, will be emerging.
The Shift in the Market
There will be several factors reinforcing the directive in creating a unified European Market:
Bigger market: as the market shifts from several autonomous markets into a single bigger one, it will become more attractive to new players and new services.
Scaling up: It will be cheaper for banks and other services to scale and operate in several countries when their legal frameworks are homogeneous which reduces development and compliance costs.
Savvy consumers: As the competition in the European market increases, so will the transparency in financial services and prices offered by European banks, which will lead to better-informed consumers, that will lead to considering foreign banks.
Consumers are increasingly more open to online and international shopping. This behavior can influence consumers’ banking behaviors as well.
In a nutshell, the European financial markets will change from domestic banks (the current status quo) into an open and European market, where European and international banks and non-banks will be able to offer their services.
Read more about the Payment Services Directive 2 (PSD2) here.
On our Fintech Trends of 2019 report, we highlighted that one of the big trends would be change brought on by new regulations, namely the Payment Services Directive 2 (PSD2). It’s a European Union Directive with the aim to contribute to the creation of a single market of payment services in Europe.
The directive
The Payment Services Directive 2 (PSD2), enables bank customers, both consumers, and businesses, to use third-party providers to manage their finances, aiming to be safe for all entities involved, efficient in time and in costs and communications infrastructure, innovative by opening opportunities for new services and competitive, pushing for an ecosystem where several providers work on.
The new players
PSD2 creates the conditions for any client (private or business) to authorize their bank to give access to their account and payment information to any other providers properly authorized by national regulations – what is called Third Party Providers (TPP).
These third party providers can be Payment Initiation Service Providers (PISP), that provide payment alternatives to credit and debit cards, Account Information Service Providers (AISP), that aggregate information, online, information from multiple accounts and offer their customers an overview of their financial position, or Account Servicing Payment Service Providers (ASPSP), that make available and hold the payment accounts of consumers.
In a nutshell, the open banking API allows these third-party providers to access consumers’ financial information (with their permission) so they can provide them with new and innovative services.
A consumer-centric market
With the implementation of PSD2, banks will no longer be competing with just other banks, but every other financial services provider. Changing the payments value chain and which business models are profitable, will result in a more consumer-centric approach to the business.
As consumers expect an increased digitalization, banks will have a harder time differentiating themselves, so they will be partnering up with startups in fintech to provide new services and better experiences, fitting customers’ convenience and expectations.
The benefits
In the end, PSD2 is a directive working towards a more open and innovative fintech market that will achieve:
More security in electronic payments: Through the use of consumer authentication methods which comply with European standards and the accountability of payment service providers in the event of unauthorized payment transactions
Better protection against fraud and payment incidents for both consumers and merchants: By certifying all payment service providers who may have access to consumers’ bank details
The emergence of payment methods tailored to consumers and merchants: thanks to reduced costs in infrastructure and transactions.
The impact of it all is still to be seen – banks must comply with all the regulations of the directive by September 2019 – but bigger players are already taking notice of the impact the directive might have on the financial market: global fintech investment has doubled to €43 billion in 2018, according to DealRoom.co.
Blockchain is a technology with the ability to disrupt several industries (we wrote about it in our 5 Fintech Trends of 2019). It has several uses, and the technology aims to create a secure, transparent, decentralized payments system. It’s most popular use is to create cryptocurrencies.
The problem with cryptocurrencies
We all have heard the stories about people who became millionaires by investing in bitcoin, and also the stories of it losing its value just a few weeks later.
This happens because cryptocurrencies’ value is centered around speculation, so they fluctuate on a daily basis, which makes them unreliable as a currency.
Stabecoins aims to help in this regard – having the benefits of cryptocurrencies – transparency, security, privacy, simplicity) but without the volatility that comes with it.
What are stablecoins
Just like other cryptocurrencies, stablecoins are digital money that aims to mimic traditional stable currencies.
How? Well, just like other currencies, stablecoins are collateralized to the value of an underlying asset (which can vary). In general, there are 4 types:
Fiat-collateralized Stablecoins: These coins are backed by fiat currencies (like USD, EUR or GBP), which means that as long as that country’s economy stays stable, so is the currency.
Commodity-collateralized stablecoins: These coins are backed by other commodities like gold and other precious metals, oil, and even real estate. They have the potential to value overtime and make investing in gold or real estate achievable for everyone.
Crypto-collateralized stablecoins: These are stablecoins backed by other cryptocurrencies. They are very decentralized because everything runs on the blockchain and enjoy more liquidity. They have not gained much tractio mostly because of its complexity.
Non-collateralized stablecoins: These coins use an algorithmically governed approach to control the stablecoin supply. This is the most decentralized and independent form of stablecoin, as it isn’t collateralized to any other asset. However, it requires continual growth to be successful.
(Read more about the different types of stablecoins here.)
How can stablecoins help in the real world
Although complex in its structure, stablecoins can be a reality and bring a lot of advantages to users.
They can be used as a day to day currency, enabling digital payments everywhere and reducing the risks of cash use.
It can streamline recurring payments and P2P payments, making it easier for employers to have employees working remotely from all over the world.
Stablecoins can also be useful in diminishing inequality and helping developing countries around the world – the money sent by migrant workers to their families can now reach them in a faster way, with much lower fees, and without the stress of volatility of current cryptocurrencies.
It can also protect citizens in case of a crash of the local currency and hyperinflation.
Where is the future going
With all its advantages, there are still some setbacks for stablecoins: fiat-backed stablecoins are managed by a single entity, which means there is a need for a regular transparent audit of its reserve, to guarantee that the entity is actually backing up their stablecoins with real fiat.
It’s also constrained by the same regulations as fiat-currency, which means conversion is less efficient, and it has less liquidity.
There’s also the chance that the asset backing the currency crashes (be it fiat or other cryptocurrencies).
Stablecoins are still in the beginnings of its development and it’s still far from a mature level. However, its stability and advantages are certainly the reasons it might help cryptocurrencies come to the mainstream.
