In the ever-evolving world of finance, the rise of fintech has been nothing short of revolutionary. Over the past decade, new banking and payments providers have propelled the growth of e-money, creating a dynamic ecosystem that has reshaped the way we conduct transactions. A remarkable example of this growth can be seen in the European Union, where e-money transactions surged to approximately 7.5 billion in 2021 alone, whilst e-money accounts have outnumbered UK current account estimates (up 108% in two years). By Nirav Patel (pictured) , CEO of fintech & e-money digital payment solutions Andaria
Yet, amidst this remarkable expansion, a crucial question emerges: Can we place our full trust in these institutions, especially when it comes to the security and protection of our e-money? It’s a question that resonates deeply, and one that must be addressed to sustain the momentum of this fintech revolution.
Enter the pivotal concept of e-money safeguarding – the bedrock upon which trust in this market is built. It’s not just about understanding the significance of safeguarding practices; it’s about recognising their power in establishing credibility and ensuring that e-money institutions (EMIs) transcend national boundaries, providing a seamless, borderless payment model.
Country-agnostic safeguarding
In the interconnected world of global business, the ability to transact seamlessly across diverse countries is no longer a luxury; it’s a necessity. Fintech institutions, especially EMIs, hold the key to unlocking this potential. By adopting country-agnostic safeguarding practices, these institutions can ensure that regardless of where a transaction originates or where it’s destined, the security of the funds involved remains paramount. This practice is not just about compliance; it’s about demonstrating a commitment to safeguarding that transcends geographical confines.
At Andaria, our commitment as a fintech trailblazer consists in solving the intricate payment challenges faced by businesses worldwide. Through our embedded offering, we address a spectrum of issues, propelling businesses forward and providing a compelling competitive advantage.
From robust encryption techniques that protect the confidentiality of transactions to multi-jurisdictional compliance protocols that bridge regulatory disparities, there are several strategies that could be implemented to form the foundation of a system that transcends borders without compromising on security.
- Robust encryption techniques: EMIs must implement state-of-the-art encryption methods to secure transactions and sensitive customer data. This involves using encryption algorithms to encode information during transmission, ensuring that only authorised parties can access and interpret the data.
- Tokenization: Tokenization is a powerful technique where sensitive data, such as credit card numbers or account details, are replaced with unique tokens. For instance, when a customer adds a card to their e-wallet, the card details are tokenized, reducing the risk of exposure.
- Cross-border regulatory compliance: Operating in multiple countries means dealing with diverse regulatory environments. Staying compliant with regulations is paramount but it’s a significant cost, and businesses need to focus on what they do best, leaving the rest to us. For example, through embedded payment offering, customers could benefit from built-in compliance features and meticulous monitoring. At Andaria, we assist in navigating complex regulatory landscapes, significantly reducing the risk of non-compliance and regulatory penalties.
Building and maintaining trust with business customers
For businesses, trust is the cornerstone of every financial decision. Whether it’s managing day-to-day finances, conducting cross-border transactions, or navigating complex financial landscapes, a secure and resilient system is non-negotiable. By offering a platform that instils confidence, EMIs become enablers of growth for businesses, propelling them to explore new horizons without fear.
Building trust by clearly and openly communicating their safeguarding practices and security measures to their business customers is paramount. This includes providing detailed information about how customer funds are segregated, the encryption methods used for data protection, and the compliance standards adhered to in different jurisdictions. This transparency demonstrates a commitment to security and helps businesses understand the steps taken to protect their e-money assets. When businesses know that their e-money is not just a number on a digital ledger but a protected asset, they can focus on innovation and expansion with peace of mind.
Businesses value the ability to monitor the progress of their financial activities and detect any unusual or unauthorised transactions promptly. EMIs can implement proactive security alerts and notifications to keep businesses informed about any potential security risks or changes to their accounts. This includes alerts for large transactions, login attempts from unfamiliar devices or locations, and updates on the latest security features or compliance changes.
Enabling financial inclusion
The implications of country-agnostic safeguarding extend far beyond individual transactions or business relationships. As an EMI, our role in fostering accessibility to financial services becomes increasingly significant. The ability to provide secure, reliable, and efficient e-money services to underserved regions or populations is a powerful tool for driving economic empowerment and inclusion.
Traditional banking often requires significant documentation, which can be challenging for the unbanked, especially in regions with limited access to formal identification. By ensuring that e-money services are not limited by borders or hindered by security concerns, EMIs can bridge the gap between traditional financial systems and the unbanked, providing them with opportunities previously beyond reach.
An embedded payment offering could provide accessible solutions and multi-currency accounts to help drive international transactions. Cross-border payments will be worth $238.9bn by 2027, so catering to multiple currencies and payment types is crucial in supporting businesses to reach a global clientele, breaking geographical limitations.
The power of e-money safeguarding is not just about compliance or technical prowess; it’s about shaping a future where trust knows no borders. It’s about empowering businesses to thrive and providing individuals with the financial tools they need to lead prosperous lives. As the fintech industry continues to evolve, it’s imperative that we recognise safeguarding as the linchpin that will propel us toward a truly borderless and inclusive financial landscape.
