Love Finance: This Week Things Are Distinctly Digital

What makes us love finance so much this week?

Biometric security and quantum computing make the future feel closer than ever.

Biometrics go mainstream

HSBC and First Direct are to launch a voice and fingerprint ID system, making it quicker and easier for UK customers to access their bank account by using the most secure form of password technology – our own being. The bank says its phone and mobile banking customers will no longer have to remember a password or memorable places and dates to access their accounts.

The technology uses 100 unique vocal identifiers including both behavioural features such as speed, cadence and pronunciation, and physical aspects including the shape of the larynx, vocal tract and nasal passages.

This comes on the heels of Atom Bank, which will allow its customers to log on via a face recognition system when it launches. Barclays has already introduced voice recognition software, but it is only available to certain clients.

We love that security and simplicity is at the heart of this roll out, but wonder whether this is the slippery slope for high-touch brands like First Direct. Once you’ve got automated recognition will automated operations be next?

Will there be a quantum leap in financial services?

As modern computing continues to push the limits of its processing power, quantum computing is starting to offer some hope for solving the future’s immeasurably bigger computing conundrums.

Quantum computers, which were once thought an impossible technology, are quickly becoming a reality. The possibilities and changes that this new form of computing might make in society, science and the more commercially focused financial organisations will be disruptive and profound.

Quantum computing could make it possible to see and compute the vast global trading patterns that current computers struggle to track. It could also keep better pace with the ever-increasing speed of real-time algorithmic trading. On a more prosaic level, it could improve efficiencies and decrease running costs by being able to handle normal tasks far more efficiently.

We love that quantum computing will radically alter the capabilities of financial services but wonder whether by opening the Pandora’s box of computation we will open up a whole new era of security and encryption worries.

Does FCA demonstrate hypocrisy in its latest due diligence response?

Is the FCA being hypocritical when it comes to its own research? Last Friday the FCA released its TR16/01 thematic review on investment platform due diligence, which chastised advisers about their investment platform selection processes.

This seems a bit rich given the FCA based its findings on a panel of just 13 firms. Surely if the estimated number of retail investment firms runs to approximately 13,000, a representative sample of say 1% (a mere 130 firms) would be more appropriate than the measly 0.1% the FCA used.

We love that the FCA is setting the standards for the industry’s due diligence, but wonder whether it would be happy if advisory firms considered a 0.1% sample as robust enough when providing investment suitability rationales.

The start of the end for FinTech?

Last month the FT broke the story that Powa Technologies went into administration with Powa’s funding partner Wellington Management allegedly calling in loans.

The story highlighted that despite raising a hefty $175 million in funding, Powa had just $250,000 available at the start of February.

This meant Powa had to hold back staff salaries and payments to suppliers, leaving some employees locked out of offices.

Having started life as a Square-clone mPOS system, Powa switched its focus to the PowaTag app, which let shoppers buy products from hundreds of retailers by snapping codes with their smartphones.

We love that some sense is being applied to this overcrowded payments market, but believe that with the development of blockchain and quantum solutions now is not the time to call the final curtain on Fintech.